FTSE continues its bounce back

Added 29th June 2016

The FTSE 100 put on another 2% in morning trading on Wednesday following yesterday’s 2.6% climb.

FTSE continues its bounce back

The index hit 6270, which is the same level it was at the beginning of the year before the referendum was called.

The biggest climbers were miner Anglo American which added 6%, insurer Prudential which rose 5.6%, and house builder Persimmon which recovered 5.2%. Other house builders and financials also saw big rises.

The FTSE 250, with its companies more reliant on domestic revenues, also climbed back but at a slower pace. It put on 1.5% this morning after gaining 3.6% yesterday to sit at 15,730.

Unlike its sister index, it still has some way to go to reverse the full Brexit slide, as it was sitting around 17,400 at the start of 2016, and also on the day before the referendum.

Sterling is not bouncing back with any velocity but stabilised and edged up in trading so far today to $1.34.

IG market analyst Joshua Mahony noted a contradiction emerging between the continued negative headlines and investor perception of UK assets.

“A disconnect is appearing between the pessimistic mood that is permeating the media and the insatiable optimism that seems to be driving yet another day of gains in the FTSE 100,” he said. “For many, the widespread selling that dominated the financial markets in the immediate wake of Friday’s referendum result was expected to persist, providing one of the deepest corrections for years. However, there is a confidence within the City that perhaps the implications to this vote may not be as immediate nor far reaching as many initially thought, providing opportunities for bargain hunters to grab shares at a discount.” 

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Alex Sebastian

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Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.



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