How the stock market reacts to the vaccination ban

Astra-Zeneca’s share price surprisingly climbs despite bad news for the company’s vaccine. But the suspension of vaccinations is affecting the British pound.

Used internationally: Hospital staff in Georgia fills a syringe with Astrazeneca's corona vaccine.

DThe stop of its corona vaccine imposed by politicians does not seem to affect the share price of the British-Swedish pharmaceutical company. On the contrary: on Tuesday the security rose 3.6 percent in trading on the London Stock Exchange. It was the biggest gain since December 29, according to Bloomberg.

Analysts at the investment bank Jefferies had recommended the Astra Zeneca share as a buy. They referred to the expected replenishment of newly developed products from the company’s laboratories. But you also mentioned that a loss of the vaccine could set back the fight against Corona and threaten the economic recovery in Europe.

The German benchmark index also reacted unimpressed to the vaccination ban. The stock market barometer rose to more than 14,500 points by the afternoon thanks to Wall Street records from the previous day. The mean value index M-Dax and the European stock market index Euro Stoxx 50 also increased. Another reason for this was that the economic expectations of financial experts, as measured by the recently published ZEW Index, surprisingly brightened in March.

On the other hand, the stop for the corona vaccine from Astra-Zeneca is noticeably affecting the British pound sterling. The currency fell around 0.5 percent against both the euro and the dollar, to 1.1598 euros and 1.3817 dollars, respectively. “Should the EMA decide that there are indeed material safety concerns at AstraZeneca, this would potentially jeopardize the UK vaccination strategy, even if the EMA no longer has any influence on the UK after Brexit,” said Jeremy Stretch of investment bank CIBC Capital Markets.

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To the detailed view

The European Medicines Agency (EMA) is currently investigating the safety of Astra-Zeneca’s corona vaccine. A press conference was announced at short notice for Tuesday afternoon. The suspension of Covid-19 vaccinations with the Astra-Zeneca vaccine in large parts of Europe after reports of blood clots is now increasingly causing criticism.

The pound sterling has gained more than four percent against the euro and more than two percent against the dollar in the past three months. Above all, the swift vaccination program and the falling number of corona infections fueled hope for a relatively quick economic recovery.