FTSE 250 approaches pre-referendum highs as equities bounce continues
Stock markets have surged again today on the back of strong employment data, as the closely-watched FTSE 250 hits a new post-referendum high.
The mid-cap index, which is seen as a better gauge of the UK economy than the larger FTSE 100, climbed back above the 17,000 mark this afternoon, and is now down by less than two per cent on its pre-referendum level.
The FTSE 100 has confounded market watchers, who had predicted double-digit declines in the weeks after a vote to leave, storming higher on the back of a weaker pound. At 6,705, up 0.1 per cent on the day, the bluechip index is trading at its highest level for 11 months.
The second-tier FTSE 250 plummeted by nearly 14 per cent in the two trading days after the EU referendum, as share prices in housebuilders, retailers and challenger banks came under immense pressure. Analysts said this reflected the fact that the collection of smaller companies typically have a heavier exposure to the UK economy.
However, as the unemployment rate dropped below five per cent and the Bank of England reported it was yet to find "clear evidence" of a dramatic Brexit slowdown, the index surged 0.8 per cent to 17,039 this afternoon.
All eyes are now on the 17,333 level which the index closed at on 23 June, with the FTSE 250 needing only a modest summer bounce to hit this pre-referendum benchmark.