European markets rebound for third consecutive day
Stocks extend advance after UK minister Andrea Leadsom withdraws PM candidacy
A trader works on the floor of the New York Stock Exchange. Tech shares rose for a fourth day, gaining 0.6 per cent to the highest in a month. Photograph: Michael Nagle/Bloomberg
European equities extended a rebound into a third day as concern eased about global economic prospects in the aftermath of the Brexit vote.
The Stoxx Europe 600 Index closed 1.6 per cent higher, with all 19 industry groups up. The UK’s FTSE 100 Index entered a bull market after Monday’s rise of 1.4 per cent took its gains since a February low to 21 per cent.
Stocks extended an advance after the UK’s energy minister Andrea Leadsom withdrew her candidacy and cleared the way for Home Secretary Theresa May to succeed David Cameron as the next British prime minister tomorrow.
Hibernia Reit and Green Reit rose at least 2.6 per cent as investors continued to pour money into Irish property investment companies on hopes that Ireland may win business from London in light of Brexit.
However, recruitment firm CPL lost 1.6 per cent after the company accompanied assurances in a trading update around its full-year earnings by cautioning that the net impact of Brexit remains uncertain.
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After recovering from its post-Brexit plunge in just four days, the gauge of UK megacaps continued its rally, and is now up 21 per cent from its February low. Analysts have joined investors and strategists in taking note, boosting profit-growth estimates for FTSE 100 members by about 4.5 per cent in just over a week, the biggest such upgrade in more than a decade. The FTSE 100 extended gains as May emerged as the next UK prime minister, ending the threat of a protracted leadership contest.
While the gauge of the largest UK companies is up 7.1 per cent this year, the FTSE 250 Index of mid-cap firms, more dependent on the domestic economy, remains 4.2 per cent lower.
Among stocks active on corporate news, LafargeHolcim rose 4.4 per cent after agreeing to sell an Indian building-materials business to Nirma for an enterprise value of about $1.4 billion. Ireland’s CRH had been linked at one stage to the bidding.
Airbus gained 2.4 per cent after on reports that it is poised to win an order for as many as 100 jets from AirAsia.
The tech-heavy Nasdaq Composite rose above 5,000 for the first time since December.
(Additional reporting Bloomberg/Reuters)