Investors appear to have taken the view that yesterday’s global markets sell-off was overdone and now it is time to buy some of the stocks worst hit,” says AJ Bell investment director Russ Mould.
Leading the charge on the FTSE 100, which advanced 1.1% to 6,920, were miners, oil producers and banks – all sectors highly leveraged to economic activity.
This feels more like a dead cat bounce rather than a healthy rebound as all the arguments behind yesterday’s sell-off remain today.
“Inflation is still a major threat and there are plenty of reasons to expect the global economic recovery to slow down.
“White goods seller Electrolux and car maker Volvo have both warned about pressures from supply chain issues, and we will no doubt get more companies issuing more mixed outlook comments when they report second quarter earnings over the coming weeks.
“There is no need to panic, but investors should remain cautious in the current environment.”