Pound is up against the dollar and FTSE100 rallies for first time since Brexit vote as fears cool

BRITAIN’S top stocks rose in value today for the first time since the Brexit vote and the pound has also strengthened against the dollar.

The FTSE100 rose 2.64 per cent over the day – gaining around £40billion in value – as it climbed up to 6140.39.

Sterling also strengthened, with £1 worth $1.33 tonight, after climbing higher than $1.34 at one point.

This is coming after the pound hit its lowest level since 1985 yesterday.

Banks and housebuilders led the fightback on the FTSE 100 – with Lloyds closing up 7.4 per cent and Barclays rising 3.4 per cent.

Taylor Wimpey surged 5.4pc and Persimmon was up 2.6 per cent.

Analysts agreed it was too early to say whether this was the start of a genuine recovery – or a “dead cat bounce”.

But any rise after the turbulence, which saw the FTSE 100 lose £85billion in value last Friday and on Monday, was welcome.

Tony Cross, market analyst of Trustnet Direct, said: “It’s still way too early to start thinking that the market is stabilising, but at least after two days of close-on free-fall, we do seem to be moving towards that idea of finding a level.

“However there’s no escaping the fact that we still have a huge amount of political and legal uncertainty in the equation right now, it’s going to take some time to work this out.

“Until there’s progress here, investors should be aware that more, but hopefully isolated bouts, of volatility could emerge.”

Laith Khalaf, analyst at Hargreaves Lansdown said it would be “premature to call the bottom of the market”.

French and German stock markets also rallied this morning, up around 2 per cent to match the recovery in London.

British currency and the FTSE have taken a pounding since the shock referendum result, which has led to volatility across global stock markets. It has been the biggest two-day global stock rout in history over the last two days with $930billion wiped off the world stock markets.

The Dow Jones closed down 260.5 at 17140.2 – its lowest since mid March.

The pound also rose 0.7 per cent to $1.33, a rebound from Monday’s $1.31 dollars, its lowest level since 1985. But currency traders warned it was still a long way from pre-referendum levels.

Against the euro, sterling was up 0.19 per cent to €1.20.

On Monday, Standard & Poor’s stripped the UK of its triple-A credit rating following the vote. The rating agency downgraded the country’s sovereign rating by two notches, from AAA to AA, saying the vote is a “seminal event” that “will lead to a less predictable, stable and effective policy framework in the UK”.