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A lot of the money lost after the Brexit vote has been recovered

London surged yesterday, wiping out the losses it had suffered on Friday and Monday.

Image: PA Images

THE BILLIONS WIPED off the British stock exchange returned yesterday, following a two-day market panic over the Brexit result.

The FTSE dipped 0.4% this morning ahead o the publication of Britain’s first-quarter economic growth data.

However, London surged yesterday, wiping out the losses it had suffered on Friday and Monday.

However, analysts warned of possible further market jitters, given the many unknowns about Britain’s path ahead as it handles its exit from the bloc and dealings with EU partners.

“First the panic effect, then the rebound. That’s a well-known mechanism on financial markets,” said Christopher Dembik, an economist at Saxo Banque in Paris.

“But we also know that after the rebound, volatility can re-emerge, and that is the main risk right now,” he said.

PastedImage-4976 The FTSE 100 over the last five days. Source: Google

“The markets aren’t calm, we are in the eye of the storm,” said Adam Jepsen at Financialspreads, adding that “not a single issue” had been resolved.

The FTSE 250, which handles more companies directly exposed to the UK domestic market, was still 1,400 points off where it was on the day of the vote, but has seen a stabilisation in recent days. The same has happened in Dublin, where the ISEQ – down 1,200 points – has seen a slight upturn in fortunes, up 0.3% today.

PastedImage-79943 The FTSE 250 over the last five days. Source: Google

The rebound was felt across the world, with New York, Paris and Frankfurt all experiencing strong days.

This morning, on currency markets, the pound edged down slightly from its New York close but managed to hold around $1.3445, well up from the 31-year-low $1.3121 touched Monday.

However, two ratings agencies have downgraded Britain’s credit rating, with Standard & Poor’s removing the country’s coveted AAA status.

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