Coronavirus: Stock markets boosted by remdesivir drug hopes

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Man near a sign in front of the Gilead Sciences headquartersImage source, Getty Images

Shares in the US and Asia have risen on hopes that an experimental drug could help treat symptoms of Covid-19.

A leading US infectious disease expert said that early results of a clinical trial on anti-viral treatment remdesivir were "quite good news".

Investors are betting the drug could help countries emerge from lockdowns aimed at curbing the outbreak.

Gilead Sciences, which is developing the drug, saw its shares rise by more than 5.5% New York trading.

White House health advisor Anthony Fauci said a National Institute of Allergy and Infectious Diseases' (NIAID) study showed that the drug had a "clear-cut, significant, positive effect in diminishing the time to recovery" from the coronavirus.

Markets had already begun to rise after Gilead said preliminary indications from a remdesivir trial showed that it helped patients recover more quickly.

A potential medical breakthrough like this is seen as a key step towards governments being able to ease the tight restrictions they have imposed on the movement of people as they try to slow the spread of the infection.

Lockdowns across the world have frozen economic activity, led to hundreds of millions of people being put out of work and raised concerns of a long, deep global recession.

Shares also got a boost from a promise by the US central bank that it would continue to shore up the American economy against the impact of the pandemic.

At the end of its two-day monetary policy meeting, the Federal Reserve left key interest rates near zero, while Chairman Jerome Powell warned that the US economy would drop at an "unprecedented rate" in the current quarter.

But he also said growth would pick up as restrictions were lifted and vowed that the Fed would continue to support the recovery.

Japan's benchmark Nikkei 225 was up by 2.1% and Australia's S&P/ASX 200 was 2.4% higher.

That came on the back of strong gains for US stock markets. The Dow Jones Industrial Average closed 2.2% higher, the S&P 500 ended up by 2.7% and the Nasdaq gained 3.6%.