Stocks and oil jump on hopes of coronavirus breakthrough

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
A patient and medical staff walk out of a ward after the patient was reportedly cured of pneumonia from the first new coronavirus infection, in Zouping City, Shandong Province, China, on 5 February. Photo: Costfoto/Barcroft Media via Getty Images

Stock and oil prices jumped higher on Wednesday, amid unconfirmed reports of a possible coronavirus treatment breakthrough.

European stocks and US futures bid up sharply early Wednesday morning, with traders pointing to a Chinese state TV report. Researchers at Zhejiang University have found an effective treatment for coronavirus, according to a Reuters summary of the report.

Separately, Sky News in the UK reported researchers at Imperial College London had made a “significant breakthrough” in the hunt for a potential coronavirus vaccine.

Samuel Springett, trading floor manager at Accendo Markets, told Yahoo Finance UK “market chatter” about both the Chinese TV report and Sky’s report was driving markets higher.

“This news has eased the fear in the markets for the time being, hence why FTSE and oil are rallying today,” Springett said.

Garry White, chief market commentator at stockbroker Charles Stanley, said the Chinese TV report should be taken “with a a few pinches of salt” given it was as yet unconfirmed.

While the Chinese report is yet to be officially verified and UK efforts at a vaccine still appears weeks away at best, asset prices spiked in response to the reports.

The strongest gains were in Germany, where the DAX (^GDAXI) was up 1.1% by midmorning. It had been flat during the first half hour of trade. Elsewhere, the CAC 40 (^FCHI) rose 0.8% in France and Britain’s FTSE 100 (^FTSE) was up 0.7%.

US futures bounced. S&P 500 futures (ES=F) were up 0.7%, Dow Jones Industrial Average futures (YM=F) were up 0.8%, and Nasdaq futures (NQ=F) were up 0.9%.

Crude oil futures (CL=F) were up 2.2% to $50.75 and Brent futures (BZ=F) were up 2.5% to $55.32.

In China, 490 people have so far died from coronavirus and over 24,000 confirmed cases have been recorded.