Wednesday, June 29th, 2016

British pound regains some power, lost after UK vote to exit EU

Narada Desk | June 29, 2016 3:43 pm Print
British shares, pound continue to recover

British shares and the pound continued to regain some of the ground lost in the wake of the UK voting to exit the European Union (EU).

After rising 2.6 per cent on Tuesday, the FTSE 100 share index was up 1.8 per cent at 6,253.07 in early morning trade on Wednesday, BBC reported.

The FTSE 250 index, which contains more UK-focused companies, rose 1.1 per cent. On Tuesday it closed 3.6 per cent higher.

The pound was up 0.4 per cent against the dollar at $1.3398, but it still remained well below levels reached before the referendum held on June 23.

The pound rose as high as $1.50 on June 23 before the result of the referendum was announced the next day.

On Monday, the pound hit a 31-year low against the dollar.

At the close of trade on June 23, the FTSE 100 stood at 6,338.10.

However, in the volatile trade following the referendum result, the FTSE 100 dropped 5.6 per cent by the end of Monday, while the FTSE 250 slumped 13.7 per cent.

However, some analysts warned the relative calm of the past couple of days on the markets was unlikely to continue.

“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.

“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.”

Shares in the financial sector, which had been particularly hard-hit in the wake of the referendum, continued to recover, with Prudential up 5.9 per cent and Barclays 3.6 per cent higher.