Stocks across Europe are continuing to rally on Wednesday, as investors start to fully come to terms with Britain’s vote to leave the European Union late last week.
Every single major index in Europe witnessed big drops across Friday and Monday, with a sea of red washing across market boards. However, some of the mild panic felt by investors in the past couple of days has now dissipated, and as a result equities across the board are now high for a second consecutive day.
Around 8:30 a.m. BST (3:30 a.m. ET) Britain’s FTSE 100, the country’s blue-chip index, is higher by 1.6% to 6,238 points, trading at a higher level than has been seen for virtually all of 2016. It should be noted that Britain’s blue-chip index is disproportionately filled with companies that denominate their assets in dollars and as a result are not hugely affected by the massive drop in the pound that has hit since the British exit from the EU, or Brexit. That means that the FTSE has outperformed its continental rivals.
Here is how the FTSE looks on Wednesday:
On a stock-by-stock basis, financial stocks have continued their rally, after taking an absolute pummelling on Monday, and all the UK’s biggest banks are higher. At the bottom of the index, travel stocks such as Tui and EasyJet are lower in the aftermath of Tuesday’s awful terrorist attack at Istanbul airport.
The smaller cap FTSE 250 paints a more accurate picture of UK investor sentiment, as the vast majority of firms in the index are wholly UK-based. It is 1.33% higher so far on the day, but is still more than 700 points lower than on Thursday, before the UK’s Brexit vote. Here is how the FTSE 250 looks:
Benchmark indexes in all of Europe’s major economies are also continuing to climb on Wednesday. Here is the scoreboard:
Here is what Mike van Dulken of Accendo Markets said in his morning email a little earlier:
A solid trend of rising lows since Monday gives hopes to Bulls that pre-Brexit and 2016 highs of 6450 can be revisited. Bears watching for any test of supportive rising lows at 6200. It’s still unclear whether this is a dead-cat bounce or the real thing in terms of recovery, but with little signs of appetite for lows to be revisited, and for the bounce to have endured a third full session and put on 500pts, bodes well in terms of the worst being behind us.
Elsewhere in the markets, the pound has continued to see small gains on the day, gaining around 0.3% on the dollar so far.