The lunchtime rally marked the market’s best day since March as it was also given something of a “Biden bounce”.
By around 2pm on Monday, the Footsie had gained 339.75 points or 5.8 per cent to hit 6,249.77, taking it back through the 6,000 mark.
Adrian Lowcock, head of personal investing at investment platform Willis Owen, said: “The market, and indeed most people, have been waiting to see some light at the end of the tunnel and the beginning of the end of the pandemic.
“The announcement from Pfizer has done just that, giving markets an injection of hope that businesses can soon return to normal. The news has boosted markets, which were already buoyant on the back of Biden’s election as US President.
“The FTSE 100 has rocketed as it has greater exposure to cyclical stocks which have been weighed down by fear of the virus and lockdowns, with the blue chip index soaring through the 6,000 mark. An end to this crisis would be a welcome relief for many of these businesses, and it is no surprise to see gains for airline and support stocks, oil majors, pubs, hotels and housebuilders, all of which rallied.
“However, while progress on the virus is good news, markets have yet to get into the detail. Vaccine trails can still fall at the last hurdle and there will be plenty of tests to be completed before a vaccine is approved.
“Even if it is, it will take time to be distributed. Today markets are full of hope, but that is rarely a good strategy for long-term investing, and we expect the coming weeks to be volatile. Investors should look to keep calm in the current environment.”
Adam Vettese, analyst at multi-asset investment platform eToro, noted: “After a tough period, markets have roared back on a series of positive developments. Following the momentum of Biden’s election victory, the news emerging from Pfizer and BioNTech of their vaccine trial showing 90 per cent efficacy is a huge step forward.
“The vaccine news has injected optimism into travel stocks in particular. The sector has been among the hardest hit by Covid-19 restrictions and EasyJet and IAG moved strongly on the back of the announcement.
“Oil stocks jumped too as any sign of a recovery in the travel sector would stimulate demand. However, while this is obviously a positive step forward there is still a way to go.
“Pfizer will only be able to submit its vaccine for emergency use once two months of data has been collected. All eyes will be on the third week of November then as we wait to see if the numbers show the vaccine can be approved.”
Russ Mould, investment director at AJ Bell, said: “Pfizer’s Covid-19 vaccine news has acted like a shot of adrenaline for the markets, triggering one of the biggest single day movements in global equities for a long time.”