LONDON MARKETS: FTSE 100 Stages Relief Rally After Brexit Selloff

By Carla Mozee, MarketWatch

Pound rises, but still trading near three-decade low

U.K. stocks pushed higher Tuesday, gaining after two sessions of heavy losses sparked by the country's vote to exit the European Union.

The FTSE 100 jumped 2% to 6,103.23, with just two components in the red. Randgold Resources PLC (RRS.LN) and Fresnillo PLC (FRES.LN) were down 0.6% and 0.5%, respectively. The shares have benefitted in recent sessions as investors sought safety in gold .

On Monday, the London benchmark fell 1.1% (http://www.marketwatch.com/story/ftse-100-slides-as-brexit-continues-to-spook-traders-2016-06-27), in a second straight selloff prompted by the result of the Brexit referendum held Thursday.

"Yes, we've seen three ratings downgrades for the U.K. overnight, but taking a glass-half-full perspective, this also means that just a little of the uncertainty is starting to ebb away," said Tony Cross, market analyst at Trustnet Direct, in a note.

Standard & Poor's Global Ratings stripped the U.K. of its triple-A credit rating (http://www.marketwatch.com/story/sp-strips-uk-of-its-triple-a-credit-rating-2016-06-28) on Monday, citing uncertainty tied to the "leave" vote. Fitch Ratings followed suit with its own cut to a double-A rating, while Moody's Investors Service had changed its outlook on the U.K.'s ratings to negative from stable on Friday.

Movers: Bank shares were gaining, with Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) up 5.4%, and Barclays PLC (BCS) (BCS) up 6.5%.

Sterling: Meanwhile, the pound was buying $1.3298 (http://www.marketwatch.com/story/pound-gains-ground-in-reprieve-from-brexit-vote-battering-2016-06-28) after hitting $1.3197 late Monday in New York, which marked a fresh 31-year low.

The U.K. is facing a leadership vacuum, after David Cameron said Friday he will resign as prime minister. The Conservative Party's leaders are aiming to have found a replacement for Cameron by Sept. 2, though Treasury chief George Osborne said Tuesday he's not considering a run.

(END) Dow Jones Newswires

June 28, 2016 04:04 ET (08:04 GMT)

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