Global stocks rose sharply Wednesday as
worries eased about the uncertainty that follows Britain's vote to leave the
European Union. The British pound also rose as talks got underway among
European leaders on how to handle the situation.
Britain's benchmark stock
index, the FTSE 100, was up 2.6 percent to 6,298. It has not suffered much
because many of its listed companies have global operation and the pound's drop
to a 31-year low will help their exports and boost the value of earnings
repatriated to Britain. Domestic companies have taken a much bigger hit.
Germany's DAX advanced 2
percent to 9,636 and France's CAC 40 gained 2.8 percent to 4,202. Futures
augured a positive start for Wall Street. Dow futures added 0.6 percent and
S&P futures rose 0.7 percent.
Investors appeared to have
set aside their anxiety over Britain's vote, encouraged by solid data on the
U.S. economy and housing market.
But analysts said market
volatility could return any time and it is too early to say that investor
confidence has made a full comeback since the vote for "Brexit," a
British exit from the EU.
"Stock markets may find
it difficult to return immediately to the levels seen before last week's vote
with buyers being wary about being too aggressive in what may yet be just
another volatile swing," said Ric Spooner, chief market analyst at CMC
Markets, in a commentary.
Global financial markets
were rattled last Friday by the vote's result, which many investors did not
seem to anticipate. Stocks and oil fell, as did the pound, while bonds and gold
rose thanks to their perceived status as safe havens. Ratings agency S&P
slashed its top-shelf credit rating for the U.K.
The British currency
recovered some of its losses this week but remained near its 31-year low. On
Wednesday, the pound rose 0.5 percent to $1.3408. In other currencies, the yen,
which strengthened sharply after the British referendum, lost some gains. The
dollar rose to 102.69 yen from 102.63 yen. The euro rose to $1.1090 from
$1.1080.
In Asia on Wednesday, Japan's
Nikkei 225 jumped 1.6 percent to 15,566.83 and South Korea's Kospi gained 1
percent to 1,956.36. Hong Kong's Hang Seng index added 1.3 percent to
20,436.12, while Australia's S&P/ASX 200 rose 0.8 percent to 5,142.40.
Stocks in mainland China, Taiwan, Singapore and Indonesia also were higher.
Benchmark U.S. crude rose 60
cents to $48.45 per barrel in New York. The contract added $1.52 on Tuesday.
Brent crude, used to price international oils, gained 58 cents to $49.84 a
barrel in London.
Credit:ABC
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