The clouds are parting and glimpses of blue sky are giving hope to investors after a chaotic few weeks. With no new troubles in the banking sector for the past 24 hours, markets are hoping that’s a sign the crisis could have peaked.
Russ Mould, investment director at AJ Bell, said: “The main indices were up across Europe and most of Asia, while Wall Street had a decent session last night. Beaten up by the chaos around the world, UK banks have been on sale for a few weeks and investors are now happy to go bargain hunting.
“Barclays led the pack on Tuesday with a 3% rise to 140.5p. Other financial stocks including M&G, Prudential and Legal & General were also in demand, with investors lured by the prospect of generous dividends from much of the sector. The fallers were yesterday’s winners – with investors top slicing holdings among gold miners and utility companies.
“The key question is whether this is the calm before the storm. The Federal Reserve’s next interest rate decision tomorrow still has the potential to kick up a fuss if the market thinks it is being too aggressive with rate rises. Investors’ nerves are already frail, and it wouldn’t take much to disturb the peace on the markets seen today.”