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Shares and the pound rebound somewhat from Brexit sell off

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Shares and the pound rebound somewhat from Brexit sell off

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There was a bit of a bounce back for share prices in London on Tuesday after the hammering they have taken since Friday.

UK banks and travel companies were among the best performers having been some of the hardest hit by Britain’s shock vote to leave the EU.

Among banks, Britain’s Lloyds and Barclays jumped five and four percent, Deutsche Bank climbed two percent, Credit Agricole and Italy’s UniCredit were up five percent and Spain’s Bankia surged 9.5 percent.

The pound rose close to one percent against the dollar following its record two-day loss. Sterling also gained one percent against the Japanese yen and edged up against the euro with one pound buying close to 1.21 euros.

The euro also nudged up versus the dollar having dropped to a three-month low after the British vote.

By the middle of Tuesday afternoon, European shares had clawed back around two and a half percentage points of the 10 percent they lost in the wake of the UK vote.

Analysts said one reason investors were no longer selling off shares is that they expect there will be a coordinated intervention by central banks to cut interest rates even more deeply into negative territory.

In a speech in Portugal European Central Bank chief Mario Draghi said central banks around the world should aim to align their monetary policies to mitigate “destabilising spillovers” between economies.

Gold – which had risen as investors sought safe havens amidst the uncertainty – saw some profit-taking, with the precious metal down 0.7 percent.

Crude oil prices regained some ground after tumbling nearly three percent on Monday. The price benefited from a looming strike in one of Europe’s biggest producers Norway.

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