Stock markets bounced back yesterday led by a resilient London that hit fresh three-year highs, recouping all of its losses in the immediate aftermath of Thursday's terrorist attacks on the British capital.
The Dublin exchange followed the European trend although its 0.7 per cent gain was more subdued than the average 1 per cent rally. Oil prices held near $61 (€51.02) a barrel as financial markets shrugged off the impact of London's bomb attacks and as a hurricane approached US Gulf oil facilities.
Along with other key European bourses, London rebounded as investors appeared to return to business as usual, pushing share prices higher in expectations of cuts in British interest rates.
By the close of trade, the FTSE 100 had risen 1.4 per cent to 5232.2 on the day and by the same percentage over the week.
Investors appeared to take the view that the long-term negative economic consequences of the London blasts were not likely to be significant.
"The psychological impact is huge but the economic impact is relatively limited," said Sandy Nairn, chief investment partner at Edinburgh Partners.
However, sterling failed to follow the revival, sliding at one time to a new 19-month low against the dollar at $1.7310.
It came off its lows after a softer than expected US jobs report but the pound continued to be dogged by expectations that the Bank of England will cut interest rates at its next meeting in August to rebuild consumer confidence after holding rates steady at its meeting on Thursday.
Like the London market, other European bourses rallied strongly from the knee-jerk sell-off after the terrorist attacks.
The FTSE Eurofirst 300 index gained 1.3 per cent to 1151.34 with the French market leading the way. Over the week, the Eurofirst was just 0.1 per cent higher.
The European equity rally was supported by further gains on Wall Street, in spite of further rises in oil prices above $61 a barrel and the release of somewhat mixed payrolls data.
The announcement by OPEC of the resumption of talks to consider raising output limits for the second time in a month did little to undermine prices.
US crude for August delivery rose as high as $61.90 a barrel before easing to $60.85, up 12 cents. London Brent was up 3 cents at $59.32 a barrel.
