Stocks and sterling show signs of life in mini-recovery after market rout
Markets jumped in the first minutes of trading this morning and the pound rose against the dollar, clawing back some of yesterday's losses.
The FTSE 100 climbed 0.8 per cent at the open, but was still below 6,000 points at 5,972 following yesterday's rout. Standard Chartered, Anglo American, Antofagasta, Glencore, Burberry and Tesco were the morning's top performers – up by more than three per cent.
Sterling has since recovered around half of yesterday's fall against the dollar, up 0.4 per cent at $1.4173 in early morning trading. One week ago the currency was trading above $1.45.
The pound also rose to €1.2638, up 0.36 per cent, ahead of another crucial day in the referendum campaign, with eight days to go, and meetings at both the US Federal Reserve, today, and the Bank of England, tomorrow.
[stockChart code="UKX" date="2016-06-15 09:04"]
The move could be a so-called "dead cat bounce" – a brief uptick in prices after a day of heavy losses as speculators hope the market has reached a trough – or a genuine correction in response to what markets now perceive as an overreaction yesterday.
At 9.06am the FTSE is up 48 points – a measurable 'dead-cat-bounce!' All is not lost – fight the good fight!
— David Buik (@truemagic68) June 15, 2016
In one of the worst runs since the financial crisis, the FTSE 100 has seen £100bn wiped off its value since the middle of last week, closing down two per cent yesterday after four separate opinion polls showed the Leave side stretching its lead in the EU referendum campaign.
"The rise is more a function of short-covering ahead of the Federal Reserve meeting than any sudden desire for risk-taking," said Jasper Lawler of CMC Markets.
"A lack of polls on the UK’s referendum decision is also helping, although it will take more than one day to undo the damage wrought in recent sessions," added IG's Chris Beauchamp.