Trading floor

Global financial markets have started to gain ground as they attempt to claw back the losses suffered in the wake of the UK's vote to leave the European Union.

The FTSE 100 opened more than 2% higher than Monday's close, but is still roughly 3% below pre-referendum levels. The more UK-focused FTSE 250 gained 2.6%, but had experienced bigger falls on Monday and Friday.

Elsewhere, the value of the pound started regain some ground. Having fallen to 31-year lows on Monday, sterling rose to $1.33-1.335 against the US dollar.

Europe's two other key stock markets saw similar increases. Frankfurt's Dax and Paris' Cac 40 indices both saw 2% rises in early trading. Smaller markets in Madrid, Brussels, Zurich and Amsterdam all saw similar gains. There was less enthusiastic news in Asia, however. Japan's Nikkei 225 rose just 0.09% and Shanghai's SSE Composite index grew 0.58%. Hong Kong's Hang Send market dropped slightly at 0.27%.

There was also better news for some of the firms hit hardest by steep falls on Friday and Monday. Barclays, which had its shares temporarily suspended on Monday after losing 10%, rose 5.7% with fellow bank, Lloyds gaining 5.9%. Monday's biggest loser, Easyjet started its recovery from 16% losses with a 5.5% gain.

Chris Beauchamp, senior market analyst at IG, said: "The sun is out in London, the FTSE 100 is rallying and even the pound is moving higher.

"You might almost think there had been no Brexit vote and no downgrade of the UK economy overnight. The FTSE's unwillingness to stay below 6,000 is remarkable, and while the damage to individual shares is still immense, some of that has been repaired today.

"A bounce was overdue, of course, and it doesn't change the short-term narrative of uncertainty and fear, nor the longer-term bear market in equities that has been ticking along for over a year now.

"Nonetheless, the sight of so many major companies trading at remarkably low multiples, such as Next and Prudential on 10 times earnings, and the juicy dividend yields on offer, has clearly been too much for some investors to resist."

But some economists have urged caution over the increases, labelling them as a "dead cat bounce" - where falling share prices rise in temporarily before continuing their decline.

Connor Campbell at Spreadex said: "This may well be a dead cat bounce, but one imagines given the state they are in the global markets will welcome any respite they can.

"With little data on the cards this morning - not that investors would be paying much attention if there were - the post-Brexit fallout will continue to define the day's trading."