According to early data analysis of stock trading, news of a breakthrough in the race to find a vaccine for COVID-19 triggered one of the heaviest trading days since the height of the pandemic crisis with trade worth around $2 trillion changing hands on Monday.
The stampede occurred in the riskier sectors including equities, bond market and foreign exchange following Pfizer Inc reported positive data on its vaccine trial; following the news traders rotated out of safe havens markets such as top rated bonds, technology stocks, and the Japanese yen.
“Volumes (are) also surging as programmes and baskets go to work to either correct portfolio balances or address margin calls,” said Mark Taylor, a sales trader at Mirabaud Securities in regard to the surge in volumes in the airlines and banking sectors.
In the United States alone, trades worth nearly $500 billion went through stock markets on Monday, marking it as one of the busiest days since March when the coronavirus, which emerged from Wuhan, Chima, stoked lockdown fears rattling financial markets.
Value stocks – companies that are more sensitive to economic cycles – saw one of their best one-day performance against their growth-focused peers ever in the United States. The bond and the currency market also saw a similar trend where volumes matched the panic trading seen during the depths of the market mayhem in March and was double that of April when the coronavirus pandemic ravaged global markets.
The total turnover for the 33 currency pairs on CLS, a major settler of trades in the currency markets, amounted to $627 billion on Monday, against a daily turnover of $707 billion in March and $380 billion in April.
The bond market also saw a surge with around 170,000 contracts changing hands on the front-month German bund futures contracts.
According to data from major trading platform Marketaxess, the total turnover on German government bonds on Monday amounted to around $10.63 billion (9 billion euros), more than the average since the start of October. “Turnover was about three times the 30-day average daily volumes in cash and very active in the futures space,” said Jimmy Conway, head of EMEA equity trading strategy at Citibank.