Finance Finance News Global stocks bounce back from Brexit shock

Global stocks bounce back from Brexit shock

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Global share markets have clawed back some ground after two sessions of steep losses following the UK’s decision to leave the European Union.

Australian shares were stronger in morning trading, with the ASX 200 index up 0.8 per cent to 5143.0 points at noon.

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London maintained its relative strength with the FTSE 100 jumped 2.6 per cent or 158 points to 6,140 boosted by banks and insurers.

Despite concerns about the effects of the Brexit on the UK economy, over the past three days British market losses have been only half the level of their Euro counterparts. They also recovered more strongly during last night’s bounce.

Euro Zone was resilient

Investors in Europe also showed some much needed resilience and went back into the market buying.

In Frankfurt, the DAX surged 1.9 per cent, or 179 points, to 9,447.

The CAC 40 in Paris gained 104 points, or 0.9 per cent, to 4,089.

On Wall Street, the Dow Jones Index rose 1.5 per cent, or 269 points, to 17,410.

The broader US indicator, S&P 500, gained 35 points, or 1.8 per cent, to 2,036, while the Nasdaq soared 2.1 per cent or 97 points to 4,692.

Commodities were mixed

Rio Tinto says it is consistently amongst the top few corporate taxpayers in Australia.
Rio Tinto says it is consistently amongst the top few corporate taxpayers in Australia. Photo:AAP

Among commodities, spot gold lost ground to $US1,311.40 an ounce, and West Texas Crude oil rose $US1.52 to $US47.85 a barrel after a two-day rout.

Meanwhile, blue chip miner Rio Tinto said it has paid $US4.5 billion in taxes and royalties globally last year, compared to $7.1 billion in 2014, due to a slump in commodity prices.

The miner said it paid an average corporate tax rate of 29.9 per cent globally over the past five years.

It also spent nearly $US18 billion dollars buying goods and services from suppliers.

Big miners like Rio Tinto are among many multinational companies that have been accused of avoiding taxes in Australia.

In currency trade, the pound rose against the greenback to above $US1.33 after reaching the lowest level in 31 years on Monday.

The Australian dollar also gained against the US dollar overnight to around 73.9 US cents.

Against other currencies, the Aussie is buying 55.4 British pence, 66.7 euro cents, 75.9 Japanese yen and $NZ1.047.

With reporting by Rod Myer

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