The pound steadied and European markets traded higher on Wednesday on speculation that policymakers globally are prepared to hold and cut interest rates to contain the fallout from the Brexit vote.
Sterling shrugged off early declines to rise 0.6 per cent against both the dollar and the euro, despite predictions that the currency has further to fall in the coming weeks.
The Euro Stoxx 50 was up 2.3 per cent in mid-afternoon trading, while the FTSE 100 traded around 1.8 per cent higher. In the US, the S&P 500 opened 1 per cent higher.
“We had a bumpy week and we’re bouncing back,” said Patrick Spencer, the equities vice chairman at Robert W Baird & Co in London.
“Not raising rates any time soon should take some of the pressure off the US dollar and the domestic economy remains reasonable, which should support earnings improvement and market fears.”
Brent crude futures rose to their highest level since the Brexit vote, trading as high as US$48.80 a barrel during the late afternoon.
“Attention is now being focused more on the fundamental data again, which points to a tighter oil supply,” wrote Commerzbank yesterday.
Shares in Dubai proved to be the exception however, closing down 0.3 per cent at 3,271.38. Shares in the capital rose 0.2 per cent at 4,417.03, led by NBAD, ADCB and Etisalat.
The Dubai, Kuwait and Oman markets are set to close from Tuesday for the Eid Al-Fitr holiday and will reopen on July 10. Saudi Arabia’s bourse will be closed throughout next week and reopen on July 10, while the Egyptian Exchange will close today as a commemoration of the revolution, reopening on Sunday.
* with agencies
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