Abu Dhabi: The immediate Brexit dust is seemingly starting to settle, with European markets finally stable on Thursday after four volatile trade sessions following the UK’s vote to leave the European Union.
Investors were also eyeing a speech from Bank of England governor, Mark Carney, during which he is expected to discuss the impact of the Brexit and assure markets of the Bank’s efforts to pump liquidity and ease turmoil.
The FTSE 100 index, which erased all losses made in the Friday and Monday sell-off, was up 0.25 per cent shortly before closing, extending its gains over the previous two trade sessions. The FTSE 250 was also 0.53 per cent higher, while Germany’s DAX was 0.25 per cent lower, and France’s CAC was 0.28 per cent higher.
In the UAE, Dubai’s benchmark index jumped 1.2 per cent, while Abu Dhabi’s main index rose 1.8 per cent supported by a rise in banking stocks.
In Italy and Spain, the benchmark indices were less than one per cent lower just an hour before traded ended, with Italy up 0.28 per cent and Spain down 0.34 per cent.
Much was the same in Asia where the Nikkei 225 index ended 0.06 per cent higher, though the Hang Seng Index continued to climb, ending the day 1.75 per cent higher.
In the US, the S&P 500 index and the Nasdaq Composite both opened nearly flat, moving within a narrow range.
Despite the stability, analysts continued to warn about upcoming volatility, especially since UK policymakers are yet to provide clarity on the political and economic plans following the Brexit.
“The two-day rally in the equity markets suggests that some investors are becoming less worried about the economic impact a Brexit might cause in the foreseeable future as central banks and policymakers stand ready to intervene whenever needed.
However, fixed income markets disagree, as investors’ flight to safety pushed many sovereign debt yields to new historic lows … The mixed signals provided by different market participants suggests one thing is certain; more volatility ahead,” said Hussein Sayed, chief market strategist at FXTM.
The fact that the UK is yet to press on Article 50 of the Lisbon Treaty means even more prolonged uncertainty for the UK and financial markets.
