interactive investor comment on Pfizer and Novacyt

News today from Pfizer has buoyed the market, but there was one big casualty.

News today from Pfizer (NYSE:PFE) has buoyed a market that was already in good spirits following the Biden victory.

This extremely positive news on the Coronavirus vaccine did, however, have one casualty. Shares in Novacyt (LSE:NCYT) lost almost half their value following the news. The company supplies Covid tests to the NHS among others. 

Lee Wild, Head of Equity Strategy, interactive investor, says: “The assumption is that an effective vaccine will wipe out demand for kits provided by the testing companies. Of course, the level of testing was never going to continue at the current pace forever, but it might not drop off a cliff as the plunge in share price might suggest. It will take many months to roll out a vaccine once decided it is safe to do so, and scientists accept that Covid will be around for years to come. If that’s the case, health services the world over will still require millions of tests every year.”

Richard Hunter, Head of Markets, interactive investor, comments: “The Pfizer announcement is not yet a panacea, but adds to investor sentiment which had already been buoyed by the Biden victory, and has sent markets to strongly positive levels.

“Beneficiaries of the rally are widespread, particularly among the more beaten down sectors. The airlines and airline-related stocks are on a tear, rising in some cases by over 25%, while housebuilders, banks and retailers are all in the boat currently being lifted by a rising tide.

“On the flip side, interestingly, some of the stocks which have seen the benefit of lockdown and could therefore have this rug pulled from underneath them in the event of a return to normality, have seen a slight markdown. The likes of Just Eat (LSE:JET), Kingfisher (LSE:KGF) and Flutter Entertainment (LSE:FLTR) have all seen declines in anticipation of slowing sales should the widespread easing of lockdowns come into play.

“It is still early days, and the practicalities point to any meaningful distribution not being available until the first few months of next year. Even so, the news is without question a positive development and has certainly captured the imagination of investors.”