The S&P/ASX 200 Index (ASX: XJO) has been a strong performer on Friday.
In afternoon trade the benchmark index is up a sizeable 2.1% to 5,529.3 points.
While almost all areas of the market are pushing higher today, one of the best performing sectors is the travel sector.
Here's a summary of what is happening in the sector:
- The Air New Zealand Limited (ASX: AIZ) share price has jumped 7.5% higher.
- The Auckland International Airport Limited (ASX: AIA) share price is up 3%.
- The Qantas Airways Limited (ASX: QAN) share price is flying 6.5% higher to $3.70.
- The Regional Express Holdings Ltd (ASX: REX) share price is up 8%.
- The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price has surged 8.1% higher to $6.27.
Why are travel shares surging higher?
Investors have been buying travel shares on Friday following news that there is a potentially effective treatment for COVID-19.
As I mentioned here earlier, there have been reports that Gilead Sciences' antiviral drug Remdesivir is delivering promising results in treating COVID-19.
According to CNBC, courtesy of healthcare publication STAT News, details have leaked from the Remdesivir phase 3 clinical trial being undertaken by The University of Chicago. These details reveal that most of its patients had "rapid recoveries in fever and respiratory symptoms" and were discharged in less than a week.
The University of Chicago's infectious disease specialist Kathleen Mullane said: "The best news is that most of our patients have already been discharged, which is great. We've only had two patients perish."
Given how hard the travel and tourism market has been hit by the coronavirus pandemic, it isn't a surprise to see these shares surge higher on this news.
What now?
If Remdesivir proves to be an effective treatment for COVID-19, then it would be a fantastic development for those vulnerable to the virus and of course the economy.
It could even mean that international borders open much sooner than expected and allow the travel market to start its recovery.
Overall, I think it would pay for investors to keep a close eye on developments. It could also be worth picking up shares in Qantas if Remdesivir proves to be the answer to the global travel market's prayers.
