FTSE 100 Wipes Out Post-Brexit Losses As Market Bounces Back

FTSE 100 Wipes Out Post-Brexit Losses As Market Bounces Back
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London's FTSE 100 Index has wiped out losses seen in the savage two-day Brexit rout after surging another 3.6% amid a global stock market fight-back.

The top flight returned to its pre-Brexit high amid hopes that Britain's EU exit will be some way off, jumping 219.7 points to 6360.1, meaning it has now clawed back nearly £100 billion lost in the immediate aftermath of Brexit.

The pound also continued to rally, rising two cents against the US dollar at 1.35, just days hitting its lowest level since 1985, while the pound also lifted nearly two cents to 1.22 euros.

The market gains follow a near-160 point rise on the FTSE 100 on Tuesday, with equities worldwide rallying strongly in a post-Brexit bounce back.

Oil prices also leapt back towards 50 US dollars a barrel in a further sign of market confidence, with Brent crude up 2.6% at 49.95.

Michael Hewson, chief market analyst at CMC Markets, said: "With no likelihood of Article 50 of the Lisbon Treaty getting triggered any time soon it seems that the status quo isn't likely to change in the short term.

"Whilst that doesn't remove the uncertainty with respect to the eventual outcome, it also means that markets are going to have plenty of time to settle into their new-found reality and equilibrium."

On Wall Street, the Dow Jones Industrial Average on Wall Street raced more than 1% higher at the time of close in London.

Across Europe, the Cac 40 in France closed 2.5% ahead and Germany's Dax added another 1.8% after European Union leaders met in Brussels - symbolically without David Cameron.

The outgoing Prime Minister has said he is not facing pressure to push the button on the EU treaty exit clause immediately, soothing investor nerves.

But away from the gains on the top tier, the FTSE 250 is still more than 7% lower than its pre-Brexit level and some experts warned the equities rally may only be a brief respite, with markets in the "eye of the storm".

Adam Jepsen, founder of Financial Spreads, said: "Any investors who think the markets have calmed down should think again. It is far more likely that we are in the eye of the storm."

Stocks that took a hammering in the Brexit-inspired sell-off continued to rise, with housebuilders and financials among those leading the charge in the top flight index.

Charles Church builder Persimmon and Taylor Wimpey clawed back ground lost in the sell-off, rising another 9% and 7% respectively, with Barratt Developments and Berkeley Group both 7% higher.

Insurers Aviva and Prudential were among the biggest blue chip risers, with gains of 7% and 6% respectively.

But airlines and travel stocks were back in the red after only a brief rally on Tuesday due to concerns that a weaker pound could deter UK consumers from going abroad.

Tour operator TUI dropped 4%, with British Airways owner IAG falling 0.4%.