FTSE 100 spikes up 4% following positive coronavirus drug experiment
The FTSE 100 index breached 5800 in IG’s pre-market trading hours, following reports that US Covid-19 patients are responding well to a Gilead experimental drug.
UK benchmark FTSE 100 index rallied nearly 4.0% in pre-market hours on Friday 17 April, based on IG data.
IG's pre-market FTSE 100 price estimates showed that the index increased by close to 200 points to push above the 5800 level at 01:00 GMT.
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Markets spike up following positive reports on Gilead coronavirus drug
Footsie’s gains mirrored those in the US, where S&P 500 and Dow Jones Industrial Average futures contracts showed an increase of around 4.5% and 4.1% respectively at the same time, according to IG numbers.
In Asia, the Hang Seng Index rose nearly 1% in early-market hours, with the Nikkei 225 and Straits Times Index also receiving slight boosts in the early session.
The lifts came after reports on Thursday 17 April pointed to largely positive but partial clinical trial data regarding the use of US pharmaceutical group Gilead Sciences's experimental antiviral drug Remdesivir to treat coronavirus patients.
The findings were derived from a study conducted by the University of Chicago on 125 Covid-19 patients. Of these, 113 were classified as having severe infections. The patients were given daily infusions of the drug. According to health sciences new site STAT, nearly all patients recovered from their symptoms and were discharged in less than a week.
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FTSE 100 set to continue rebound following brief dip
On Wednesday 15 April, the FTSE 100 had dropped below the 5571 level – its support level, and put an end to the index’s week-long bull run of higher lows, according to IG UK senior market analyst Joshua Mahony.
‘With the stochastic oscillator hitting the most oversold level in over a month, we are starting to see a rebound come into play, in what looks like the start of a bullish day ahead,’ he wrote in a note posted on Thursday 16 April.
However, he added that the drop below 5571 does bring up the possibility for this ‘higher low’ trend to ‘provide a retracement rather than another leg higher with a move through 5944’.
As such, he deduced that while the near-term picture does look bullish, it is also worthwhile watching out for Fibonacci resistance around 5785 and 5846 as potential bearish reversal points.
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