At the close: FTSE 100 back on the up as markets and sterling recover some lost ground
The FTSE 100 ended a four-day losing streak and sterling recovered some of its lost ground in a reassuring day for the markets.
After yesterday's routing which wiped £30bn from the UK's leading companies, the blue chip index ended up 0.7 per cent at 5,966.80. That wasn't enough, however, to offset even half of yesterday's dramatic losses, let alone the other three days' worth.
Sterling also climbed against the dollar as a lack of referendum news and this evening's decision from the US Federal Reserve focused investors on the greenback. The pound was up 0.6 per cent just shy of $1.42 this afternoon.
Mining companies topped the pile. Antofagasta rose seven per cent to stand at 422.90p, with Glencore and Anglo American also up by more than five per cent. A strong set of employment figures, meanwhile, were just the latest sign that the UK economy may not be suffering the dreaded pre-referendum paralysis.
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"Markets have taken a bit of a Brexit breather. Stocks have seen a modest rebound from a sharp sell-off at the start of the week. The rise is more a function of short-covering ahead of the Federal Reserve meeting than any sudden desire to take risk," said Jasper Lawler of CMC Markets.
However, it is almost certainly too soon to call an end to the referendum ups-and-downs. As Joshua Mahony, a market analyst at IG pointed out: "Despite today’s bounce, market sentiment is not necessarily pointing towards a recovery, with key fear barometers such as the yen and treasuries continuing to attract flows."
Moreover, when the FTSE 100 closed in on 6,000 in the final minutes of trading, sellers gained the upper hand, sending the index down 30 points at the end of the day. Such a move suggests the so-called "dead cat bounce" could have reached its ceiling, with 6,000 once again the big resistance point for the market.
However, with Fed chair Janet Yellen preparing her lines – while keeping her powder dry – that could all change by the time the opening bell sounds tomorrow.