European stocks are extending their rally into a fourth day as investors continue to shrug off the initial shock of Britain’s vote to leave the European Union.
Stocks initially tanked after the Brexit vote but have now roared back and are in their fourth day of positive trading.
In Britain, the FTSE 100 — which on Thursday closed at its highest level since August 2015 — is higher by around 0.36% at around 8:20 a.m. BST (3:20 a.m. ET) to trade at 6,527 points. The index is now more than 150 points higher than it was prior to the referendum.
Stocks are still benefiting from comments made by Bank of England governor Mark Carney on Thursday afternoon. Carney assured the markets that the BoE is prepared to deal with any shocks to the economy post-Brexit and hinted that more quantitative easing may be implemented in the summer.
Here is the chart of the FTSE’s performance this week:
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 since the vote to leave the EU.
Elsewhere, the FTSE 250 — which paints a more accurate picture of UK investor sentiment as the vast majority of firms in the index are UK-based — has also continued to climb, by around 0.4% so far today. Despite four days of gains, the index still remains around 1,000 points below its pre-referendum level however. Here is how that looks:
In the broader European markets, there are gains across the board, although as in the UK, gains are marginal. Here is how the European markets look so far on the day:
In his morning email to clients, Mike van Dulken of Accendo Markets notes that today’s rally:
“…comes as the global post-Brexit vote rally got a shot in the arm via hopes (a borderline confirmation) of more stimulus from the Bank of England this summer to offset the economic impact of uncertainty related to the UK’s referendum result to leave the EU. And while markets like the idea of more stimulus from any major central bank, they especially like the idea that a weak GBP sterling keeps the USD strong and thus fends off the Fed from a rate rise for a good while longer.”