London/Sydney — Stocks gained and bonds dropped on Wednesday as news of a working Covid-19 vaccine outweighed worries over surging infections, fueling rotation towards cut-price losers from the coronavirus pandemic such as travel stocks.
Travel-related stocks gained 1.1%, while tech companies — which, along with US counterparts, have surged since the coronavirus-driven crash in March — fell 0.5%. “The market is not wrong — we know who benefited during Covid-19, and it was almost inevitable that if Covid-19 comes to an end, you would have a reversal on that,” said Luca Paolini, chief strategist at Pictet Asset Management.
Nearly $2-trillion changed hands on Monday alone, one of the heaviest trading days since the height of the pandemic crisis. Tech stocks, among the major winners in the pandemic, have lost out, as have safe-haven currencies such as the yen. New Zealand bonds crumbled as traders swiftly repriced a much lower likelihood of negative rates, lifting the 10-year yield by 14.5 basis points to 0.898%, the steepest one-day rise since panic selling in March.