European stock market close 29 June 2016
- FTSE +3.2%
- Cac +2.4%
- Dax +1.7%
- Ibex +3.3%
- FTSE Mib +2.1%
European bonds
- Italy 1.37% -3bp
- Spain 1.26% -6bp
- Portugal 3.08% -6bp
- Germany -0.127% -2bp
- Greece 8.25% -36bp
The FTSE's recovery from Brexit is pretty astounding in the grand scheme of things. There may be several factors at play. One is that a lot of companies listed do a lot of their business offshore so are potentially out the way of any domestic fallout. Another reason is that there are some wild expectations for a rate cut and more QE from the BOE. Add in the current rate picture (or lack of) in the US too and there may be some who are thinking that we're still far from ending the easing cycle.
Some of those reasons may be built on shaky ground so I wouldn't be so stupid to suggest that indices are going to keep on running higher. That said, stock markets haven't been rational for many years now.
Whatever the reason, the
wider market will be soothed by this swift retrace and that will add
further support to the UK and the pound.
FTSE H4 chart
