This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-36660133

The article has changed 9 times. There is an RSS feed of changes available.

Version 6 Version 7
UK shares continue to recover ground FTSE 100 closes above pre-Brexit level
(about 1 hour later)
UK shares and the pound have continued to regain some of the ground lost in the wake of the Brexit vote. The FTSE 100 has surged through the level it closed at last Thursday, recovering all of the ground it had lost in the wake of the Brexit vote.
The FTSE 100 share index was up 2.4% at 6,287.28, after rising 2.6% on Tuesday. The FTSE 100 share index closed up 3.6% at 6,360.1 after a flurry of last-minute trading.
The pound rose 1.2% against the dollar to about $1.35, although sterling still remains well below levels reached before the referendum. At the close of trade on Thursday last week, before the referendum vote, the FTSE 100 ended the day at 6,338.10.
Analysts also warned that the rally of the past couple of days might be short-lived. The pound also strengthened against the dollar and euro.
"Stocks and the pound are continuing to firm but the post-Brexit reality will bite sooner or later," said Joe Rundle, head of trading at ETX Capital. Analysts said the sharp recovery in the FTSE 100 was unexpected.
"It is safe to say that, of all the post Brexit outcomes discussed across the City over the past few months, 'buying frenzy' was not one that was viewed as very likely," said Chris Beauchamp, senior market analyst at spread betting firm IG.
"The plethora of bargains on offer, plus a welcome period of calm in the UK/EU relationship has provided the opportunity for markets to recover in impressive fashion," he added.
However Joe Rundle, head of trading at ETX Capital, warned reality was likely to bite soon.
"What we're seeing in the FTSE is hope in Britain being able to ride it out by remaining part of the single market. This looks like wishful thinking.""What we're seeing in the FTSE is hope in Britain being able to ride it out by remaining part of the single market. This looks like wishful thinking."
Over the worst? The FTSE 250 - which contains more UK-focused companies - closed 3.2% higher on Wednesday, but still remains more than 7% below its pre-Brexit level.
The pound rose 1.2% against the dollar to about $1.35, although it also remains well below levels reached before the referendum.
The pound had risen as high as $1.50 on Thursday as traders anticipated a 'Remain' vote, but by Monday it had plunged to a 31-year low against the dollar.The pound had risen as high as $1.50 on Thursday as traders anticipated a 'Remain' vote, but by Monday it had plunged to a 31-year low against the dollar.
Sterling rose 0.9% against the euro on Wednesday to €1.2168. Before last week's referendum it had been trading around €1.30. Sterling rose 0.8% against the euro on Wednesday to €1.2159. Before last week's referendum it had been trading around €1.30.
At the close of trade on Thursday last week, the FTSE 100 stood at 6,338.10. However, in the volatile trade following the referendum result the index had dropped 5.6% by the end of Monday. Shares in Asia also continued to rise on Wednesday, and stock markets across Europe followed suit. Germany's Dax index ended the day 1.8% higher while France's Cac 40 closed up 2.6%.
The FTSE 250 - which contains more UK-focused companies - slumped 13.7% in the two trading sessions following the referendum result. The index was 2.8% higher on Wednesday, after rising 3.6% on Tuesday. US markets joined in the global stock market rally, with the Dow Jones Industrial Average rising 1.3% and the wider S&P 500 index up 1.4%.
Shares in Asia also continued to rise on Wednesday, and stock markets across Europe followed suit. Germany's Dax index rose 1.6% while France's Cac 40 was up 2.4%. Michael Hewson, chief market analyst at CMC Markets, said investors had been reassured by hopes that Britain's EU exit wouldn't happen immediately, meaning the status quo was unlikely to change in the short term.
US markets opened higher, with the Dow Jones Industrial Average rising 1% and the wider S&P 500 index up 1.2%. "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," he said.
Joshua Mahony, market analyst at IG, said: "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. But Adam Jepsen, founder of Financial Spreads, urged caution: "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."
However, he added: "The big question is whether the worst is over, and the answer is unlikely to be yes. Shares in the financial sector - which had been particularly hard-hit in the wake of the referendum - continued to recover, with Prudential up 5.5% and Barclays 4.9% higher.
"Sentiment is almost entirely dictated by unknown quantities for the coming months and even years, where the next major event coming when or if article 50 is enacted.
"As such, having such a long period with this colossal cloud hanging over financial markets will be unlikely to help confidence and risk appetite."
Shares in the financial sector - which had been particularly hard-hit in the wake of the referendum - continued to recover, with Prudential up 3.3% and Barclays 3.7% higher.
The increases came despite credit rating agency Moody's cutting its outlook on the UK banking sector to "negative" from "stable" late on Tuesday. Moody's also downgraded its outlook on the ratings of a number of UK banks and insurers.The increases came despite credit rating agency Moody's cutting its outlook on the UK banking sector to "negative" from "stable" late on Tuesday. Moody's also downgraded its outlook on the ratings of a number of UK banks and insurers.
Shares in housebuilders - another sector that suffered in the dramatic sell-off on Friday and Monday - were also higher. Persimmon and Barratt Developments were both up by about 6%. Shares in housebuilders - another sector that suffered in the dramatic sell-off on Friday and Monday - were also higher. Persimmon and Barratt Developments were both closing over 7% higher.
After losing some ground on Tuesday, the price of gold rose 0.5% to $1,318.70 an ounce. After losing some ground on Tuesday, the price of gold rose 0.4% to $1,317.75 an ounce.
Gold is viewed as a safe asset in times of uncertainty and the price of the precious metal hit a two-year high on Friday in the wake of the referendum result.Gold is viewed as a safe asset in times of uncertainty and the price of the precious metal hit a two-year high on Friday in the wake of the referendum result.
Government bonds are also considered safer investments. Continuing high demand since the referendum meant the return on 10-year UK government bonds remained close to Monday's record low, when the yield dropped below 1% for the first time. Government bonds are also considered safer investments. Continuing high demand since the referendum meant the return on 10-year UK government bonds remained close to Monday's record low, when the yield dropped below 1% for the first time.
High demand tends to push up bond prices, and when the price of bonds rises their yield falls.High demand tends to push up bond prices, and when the price of bonds rises their yield falls.