European shares rise for second day after Brexit calamity
FTSE 100 returns to pre-Brexit levels but more UK-exposed stocks remain down
In London, the FTSE 100 index of blue-chip stocks rose above last Thursday’s close, erasing the 8.7 per cent slump suffered in the wake of Britain’s vote to leave the European Union. Photograph: Daniel Leal-Olivas/AFP
European shares rose for the second consecutive day after a two-day sell off that erased some $3 trillion (€2.7 trillion) from the value of global equities.
In London, the FTSE 100 index of blue-chip stocks rose above last Thursday’s close, erasing the 8.7 per cent slump suffered in the wake of Britain’s vote to leave the European Union.
However, the FTSE 250 index of more UK-exposed stocks remains down almost 8 per cent since last Thursday, while the pan-European Stoxx Europe 600 is down almost 6 per cent.
Sterling was last up 1.4 per cent at $1.3522 against the dollar to recover a full 4 cents after Monday’s 31-year low.
Ryanair, one of the companies most affected by Brexit uncertainty, rose 2 per cent to €11.01, while CRH added 5.4 per cent and closed at €25.75.
After a gain on Tuesday, Bank of Ireland fell 1.6 per cent, though it had been trading 3.7 per cent lower at one point in the session. The stock plunged 38 per cent over the course of Friday and Monday.
Its top two board members bought shares in the lender, with chief executive Richie Boucher buying 99,000 shares at 0.1899 cents each for a total outlay of less than €19,000 and chairman Archie Kane acquiring 200,000 shares at 0.1945 cents, costing him almost €40,000.
Providence Resources fell 13.6 per cent on low volume after the troubled oil explorer reported operating losses of €13.1 million for 2015, more than double the €6.4 million operating loss recorded in 2014.
Energy shares added 40 points to the index’s rise, the biggest contribution by a sector, as oil prices jumped after the US government reported a larger-than-expected weekly withdrawal from crude inventories.
The UK banking index rose 2.5 per cent and the life insurance index gained 5.5 per cent, as insurers Aviva and Prudential made gains of 7 per cent and 6 per cent respectively.
Tour operator TUI fell 3.8 per cent after JP Morgan cut its target price on the stock, while British Airways owner IAG, which issued a profit warning within hours of the Brexit result last Friday, fell 0.4 per cent.
In France, the Cac 40 closed up 2.6 per cent, while Germany’s Dax added another 1.8 per cent.
Turkish aviation stocks fell after the attacks at Istanbul airport threatened to further hurt the nation’s struggling tourism industry.
Oil prices jumped after the US government’s report on inventories. Chevron’s shares were up 2.8 per cent, providing the biggest boost to the Dow Jones. Exxon was up 1.8 per cent.
All 10 major S&P indexes were in the black, led by a jump of more than 2 per cent in the energy index. Adding to the upbeat sentiment, data showed US consumer spending increased 0.4 per cent in May.
– (Additional reporting: Reuters / Bloomberg)