LONDON — Pressure has eased on UK financial markets after two days of turmoil in the wake of the Brexit vote, with the FTSE 100 share index closing higher.
The index ended up 2.64Per Cent at 6,140.39, while the FTSE 250 had gained 3.6Per Cent.
The FTSE 100 lost 5.6Per Cent in the previous two trading sessions, while the more UK-focused FTSE 250 had slumped 13.7Per Cent.
The pound also showed signs of recovery, rising 0.4Per Cent against the dollar to $1.3278 and adding 0.18Per Cent against the euro to €1.2018.
The pound had risen as high as $1.50 shortly before the result of the vote became clear on Friday morning.
But on Monday, the currency plunged to a 31-year low against the dollar, while some share trading was temporarily halted.
Also on Monday, yields on 10-year government bonds sank below 1Per Cent for the first time as investors bet on an interest rate cut.
The UK market recovery was led by the sectors that had been worst hit in the past two days' trading - banks, property and airlines.
Shares in gold miners, which had performed well on Monday, were among the biggest fallers on the FTSE 100 as the gold price weakened.
Other European stock markets also made gains, with the Dax in Frankfurt up 1.9Per Cent and the Cac in Paris up 2.6Per Cent.
All three stock exchanges have fallen more heavily than London in the past two days of trading since the vote by the UK to leave the EU.
On Wall Street, all three major indexes opened higher, up around 1Per Cent in early trading.
In another development, the Bank of England injected funds worth £3.1bn into UK banks, following a special auction for six-month finance.
It was the first such operation since the referendum vote.
Banks bid for £6.3bn worth of liquidity, but the Bank allocated less than half that amount.
The stock market rise came as Chancellor George Osborne warned that the UK faced further economic setbacks.
Early on Monday, the chancellor had attempted to reassure investors and calm the markets, saying the UK was ready to face the future "from a position of strength".
(BBC)
