Markets’ Reaction To Pfizer Vaccine Announcement

Markets' Reaction To Pfizer Vaccine Announcement

On 9th November, American Pharma company Pfizer announced preliminary results of its Covid-19 vaccine which was found to be 90% effective in preventing Coronavirus. With this announcement, hope for the restoration of normal life arose across the globe. Let’s find out how markets reacted to this announcement.

Crux of the Matter

Pfizer’s Announcement
US pharma Pfizer announced preliminary results of its Covid-19 vaccine which was found to be 90% effective in preventing Coronavirus. Pfizer said that it will supply 50 million doses this year and 1.3 billion next year if the vaccine gets approved. After results, Pfizer’s stock surged. Take a look at the chart below:

Fall In Zoom, Netflix, & The Likes
The announcement also led to a fall in prices of stock of businesses like Zoom (video calling app), Netflix (OTT platform), exercise equipment, healthcare that were on a rise during Covid-19. Have a look at the infographic below to know more.

Stocks Of The Old Normal Rose
In hopes of revival, stocks of airlines, leisure, hotels, etc industries surged after Pfizer’s announcement. Here are some examples:

Indian Stock Market At All-Time High
Nifty and Sensex reached their all-time high after US election results and Pfizer’s Covid-19 vaccine announcement, which renewed enthusiasm in people for a faster economic recovery worldwide.

However, Nifty Pharma and Nifty IT showed declining trend as investors pulled out money from them to invest (or have short term gains) in sectors like tours & travel, airlines, etc that were expected to rise after Pfizer’s announcement. Among Pharmas, Lupin, Cipla, & Cadila Healthcare dropped by 6%. Take a look at the graphs below:

In tandem with the world market, India’s stocks of cinema, travel, & airline industries surged. Here are some examples:

Fall In Prices Of Gold and Silver
Gold and Silver were considered safe havens during Covid-19 peak and lockdowns due to limited investment options and in fear of recession, but now in hope of the vaccine, their prices fell too.

Some scientists say that final results are yet to come and this announcement comes with caveats as the trial is still underway. Some scientists have warned of the early hype as long term effects and efficacy are yet to be measured.

As I have long said, Pfizer and the others would only announce a Vaccine after the Election, because they didn’t have the courage to do it before. Likewise, the FDA should have announced it earlier, not for political purposes, but for saving lives!

Donald Trump

Read More: What Is Mahurat Trading?

  • Pfizer was a constituent of the Dow Jones Industrial Average from 2004 to 2020. It was replaced by Amgen on August 31, 2020.
  • Pfizer scientist Jasper H. Kane suggested using a deep-tank fermentation method for producing large quantities of pharmaceutical-grade penicillin. As a direct result of the war and the War Production Board, by June 1945, over 646 billion units per year were being produced, majority of which were by Pfizer.
  • In September 2009, Pfizer pleaded guilty to the illegal marketing of the arthritis drug Bextra for uses unapproved by the U.S. Food and Drug Administration (FDA), and agreed to a $2.3 billion settlement, the largest health care fraud settlement at that time.