Coronavirus: Markets climb on 'encouraging' Gilead trial and Fed support

Tom Belger
Finance and policy reporter
Gilead reported 'encouraging' results of coronavirus treatment trials. (AP Photo/Eric Risberg, File)

Major European stocks continued to climb on Thursday, as hopes over a coronavirus drug trial and support from the Federal Reserve lifted stocks.

The pan-European Stoxx 600 index (^STOXX) rose by 0.4%, while Germany’s DAX (^GDAXI) climbed by around 0.7% and France’s CAC 40 (^FCHI) was up 0.8% at around 8.30am in London.

London’s FTSE 100 (^FTSE) also rose on the open, before sliding 0.3% as oil giant Shell and asset manager St James’ Place slashed dividends. The UK’s leading index had risen to a seven-week high on Wednesday.

It came after “encouraging” results were reported from a coronavirus treatment trial using the remdesivir drug, created by US biopharmaceutical giant Gilead Sciences (GILD).

More than 100 patients at a University of Chicago hospital were mostly out of hospital within a week after taking the drug, suggesting it was speeding up recovery. The drug was designed to tackle ebola.

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With many countries in Europe beginning to gradually lift lockdown restrictions, investors’ hopes are also growing of further easing of curbs on business activity.

Comments by US Federal Reserve chair Jerome Powell also reassured the markets. He said on Wednesday it was not the time to worry about debt levels, but instead the time to use “great fiscal power” to protect the US economy.

The central bank signalled it would keep rates near zero until there were signs the economy had recovered from the pandemic and lockdown.

Futures were pointing to a small rise in US stocks on Thursday. S&P 500 futures (ES=F) and Dow Jones Industrial Average futures (YM=F) were up just under 0.1%, while Nasdaq futures (NQ=F) were 0.4% higher.

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