Stock markets in the US and Europe have been lifted by encouraging news on a potential coronavirus treatment, as investors seize on any sign of progress in tackling the threat to the global economy.
An update from Gilead Sciences on trials of its closely-watched drug remdesivir tempered worse-than-expected figures which showed the US economy shrank at its worst rate since 2008 in the first quarter of the year as the COVID-19 crisis began.
Preliminary data showed, the company said, that remdesivir improved symptoms in patients given the drug early than among those who were treated later.
17 April: Gilead boss discusses COVID-19 drugs trials
It said 62% of patients treated early were discharged from the hospital, compared with 49% of patients who were treated late.
Market analysts said investors seized on the statement – bolstering not only the company’s Nasdaq-traded share price by more than 9% – as it was also credited with bolstering optimism on European stock markets.
The FTSE 100 closed the day 2.6% up – easily overcoming the 6,000 point level for the first time since early March – at 6,115.
But the blue chip index still remains about 19% down in the year to date after the collapse in values that began on 21 February when fears of a deep global recession first emerged on financial markets.
Barclays was among the big winners in London, rising almost 15%, after it reported a strong performance from its investment bank during the first quarter of the year when the market mayhem began.
Travel stocks such as Carnival and easyJet – among those worst hit in the stock slump – were also up sharply.
The CAC in France and DAX in Germany made similar strides to the FTSE, in percentage terms, in Wednesday’s session.
US stock markets also built on recent gains, despite official figures charting a 4.8% slump in output, on an annual basis, in the world’s largest economy during the first three months of the year.
The Dow Jones Industrial Average was trading more than 2% higher.
Boeing 737 MAX planes have been grounded since March last year
Boeing, still reeling from the grounding of the 737 MAX before the coronavirus crisis forced the airline industry into hibernation, was among the big stock market winners.
Its chief executive told investors he now saw a “thaw” ahead for the sector but announced that up to 10% of its workforce, more than 15,000 staff, would be lost as it sought to save costs and adjust to life after lockdown.
Neil Wilson, chief markets analyst at Markets.com, said the indication of positive results from Gilead’s drug trials for treating COVID-19 boosted sentiment more widely.
He wrote: “This is undoubtedly positive for risk – the closer you get to treatment or a vaccine the quicker we reopen the economy and the lower the risk of a 2nd, 3rd wave outbreaks.
“Rumours of positive results from Gilead a week ago helped lift spirits and this is yet more encouraging news.”