Global stocks jump on coronavirus drug hopes
US stocks have risen sharply at the open and European stocks have turned higher after Gilead said it had seen positive signs from its experimental coronavirus drug remdesivir.
Markets climbed despite the sharpest fall in US GDP since the financial crisis. The US’s Dow Jones index was up 1.8 per cent while the S&P 500 was 2.1 per cent higher. The Nasdaq had jumped 2.5 per cent
In Europe, the UK’s FTSE 100 was up 2.3 per cent. The pan-European Stoxx 600 was one per cent higher and Germany’s Dax had climbed 1.8 per cent.
Global equities were boosted after US pharmaceutical firm Gilead said positive data had come out of a trial of its experimental antiviral drug remdesivir.
The firm said that in a trial run by the US National Institute of Allergy and Infectious Diseases, remdesivir helped coronavirus patients recover faster than standard care. Shares in Gilead rose two per cent.
Investors had already priced in the expected fall in first quarter US GDP, which came in at 4.8 per cent today in the worst reading since the financial crisis. Analysts warned that worse is yet to come, however, with some predicting a second-quarter GDP plunge of more than 30 per cent.
Looking past the dire data, markets were also boosted by better-than-expected results from Google owner Alphabet last night. Its first-quarter revenue was up 13 per cent year on year to $41.2bn. Alphabet’s shares jumped around eight per cent today.
Global stocks continue strong recovery
Global markets have recovered strongly in recent weeks after falling around 30 per cent at record speeds in February and March.
In the US, the S&P 500 is only around five per cent off for the year while the Nasdaq is roughly five per cent higher.
The recovery in European markets has been less pronounced, with indices still more than 15 per cent off.
“The recent upside seen in European and US stocks appears to be a combination of optimism over easing lockdown restrictions, coupled with the ever-present influence of huge global stimulus packages,” said Joshua Mahony, senior market analyst at investment platform IG.
“However, huge economic questions remain until we find a vaccine,” he said.
“Easing lockdown measures [is] unlikely to bring back complete normality thanks to the virus that continues to influence decisions on both the business and consumer level.”