Vaccine breakthrough jolts market victims back to life

www.afr.com
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Pfizer unleashed a global rally in beaten-down stocks with news its vaccine candidate is more than 90 per cent successful, while investors trashed shares of COVID-19 winners.
And while on Wall Street, Netflix fell 9 per cent to $US470.5, the ASX-listed data centre owner NextDC fell 14 per cent to $12.10 after riding high for months on binge television streaming.

Qantas soared 8.3 per cent to $5.07 and Sydney Airport added 9.6 per cent at $6.62. Both stocks have suffered through a combination of domestic border closures and international travel restrictions.

Travel services stocks kept up too: Flight Centre rose 9.3 per cent to $15.70, Webjet advanced 13.6 per cent to $4.86 and Corporate Travel Management climbed 15.8 per cent to $19.83.

Global pharmaceuticals giant Pfizer believes it can produce 50 million doses of its vaccine before the end of the year.

"Against a backdrop where you have interest rates remaining low and governments willing to spend, a successful vaccine being rolled out is really good news," said Ausbil Investment Management chief investment officer Paul Xiradis.

"Growth over the next 12 months, if it is successful, will be even higher than the market's currently expecting."

Faster growth will translate to more favourable conditions for stocks whose earnings are linked to the economic cycle. Growth stocks, on the other hand, are prized for their ability to earn irrespective of recessionary conditions.

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Investors have been patiently waiting for beaten-down stocks to rally, unwilling to pay a premium for more popular but untested companies.

"For value managers, the overnight move was encouragement after a pretty long winter," said Maple-Brown Abbott chief investment officer Garth Rossler. "I think people are starting to look at valuation differentials and thinking something's going to close them."

People are dying to get out there and lead a normal life. — Paul Xiradis, Ausbil

The major banks led the market gains on Tuesday in…
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