The positive jump comes after the FTSE 100 retreated on Friday as concerns grew over the rise in COVID-19 infections in the UK. But the index still managed to record its best weekly gain since April following hopes of the Pfizer coronavirus vaccine. Today US-based firm Moderna announced its vaccine is highly effective in preventing people from getting ill from COVID-19 and works across all age groups. Following the announcement FTSE was up 1.7 percent just after midday.
Meanwhile the Dow Jones Industrial Average jumped about 1.1 percent in morning trade.
Russ Mould, AJ Bell investment director, told Reuters: “After the vaccine-infused euphoria at the start of the week a dose of reality seems to have been administered to the market.
“Clearly the COVID-19 crisis is not at an end despite the positive news announced by Pfizer and counterparts in Russia.”
It also comes as the UK and EU are set to resume trade talks in Brussels on Monday in an attempt to close the gaps on competition rules and fisheries.
Last week James Smith, developed market economist at ING, told Reuters: “Most think that talks realistically can’t stretch much further without causing some degree of logistical problems.
“That said, this is politics at the end of the day and neither side will want to be the one seen to end negotiations.”
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5pm update: FTSE closes 1.7 percent higher
The travel industry saw a boost amid hopes of reopening flight routes and increased traffic due to the vaccine.
Among the top risers were jet engine maker Rolls-Royce saw stock soar 9.9 percent, airline group IAG also jumped 9.7 percent and hotel chain Whitbread – which owns Premier Inn and Accor – rose by 9.8 percent.
Likewise movie theatre group Cineworld jumped 13.5 percent and cruise operator Carnival gained 12.1 percent.
4pm update: Travel industry shares up
Cineworld up 12 percent, Whitbread up 10 percent, Rolls Royce up 10 perent while takeaway delivery services JustEat and Ocado dropped.
3pm update: Wall Street stocks jump on US vaccine hopes
Dow Jones Industrial Average is up 329 points (1.1 pecent) at 29,809 points, S&P 500 is up 23 points (0.65 percent) at 3,608.5 points and Nasdaq is up 31 points (0.27 percent) at 11,861 points
1.35pm update: Latest coronavirus vaccine update boosts markets
The FTSE 100 is up 1.7 percent following the news a second Covid-19 vaccine could soon be approved for use.
Stocks across the globe rallied after US firm Moderna said published results showing its vaccine was 94.5 percent efficient.
Global stocks are now set for a record high.
11.48am update: Global stocks rally
Global stocks eyed a fresh record high on Monday as signs of economic recovery in Asia, recent strong corporate earnings and hopes of a COVID-19 vaccine bolstered investor sentiment.
The MSCI World Index of global shares rose 0.5 percent to 608.79 points, just shy of the record high hit briefly earlier in the month, helped by strong overnight gains in Asia’s leading markets and a stronger open for most European bourses.
MSCI’s broadest index of Asia-Pacific shares outside Japan hit its highest level since launching in 1987 as Japan pulled out of recession, China posted better-than-expected industrial output data and the region signed the largest ever trade deal.
Taking their lead, European indices also rose with Britain’s FTSE 100 and the pan-Europe STOXX Europe 600 both up around 0.7 percent.
“The markets get the new trading week off to a solid start, which is encouraging given all the excitement generated in the last seven days by news of vaccine breakthroughs,” said AJ Bell investment director Russ Mould.
“Solid and steady gains are arguably just what investors need after a very volatile period.”
10.45am update: Latest FTSE-100 price
The FTSE-100 index at 10:45am was up 46.32 at 6362.71.
9.00am update: Currency latest
The pound at 9am was 1.3214 dollars compared to 1.3172 dollars at the previous close.
The euro at 9am was 0.8977 pounds compared to 0.8975 pounds at the previous close.
8.10am update: FTSE jumps on open
FTSE has jumped 40 points on open – a 0.64% rise in just 10 minutes.
The UK index closed at 6,316 yesterday and is already at 6,356 today.
8.00am update: Currency latest
The pound at 8am was 1.3224 dollars compared to 1.3172 dollars at the previous close.
The euro at 8am was 0.8966 pounds compared to 0.8975 pounds at the previous close.