The FTSE 100 added 0.75% during the morning session on Tuesday as its mood picked up following an underwhelming start to the week.
“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.
Miners, oil producers and banks led the way on Tuesday, 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,” said Mould.
“Inflation is still a major threat and there are plenty of reasons to expect the global economic recovery to slow down.”
“There is no need to panic, but investors should remain cautious in the current environment,” Mould added.
FTSE 100 Top Movers
Rolls-Royce (3.11%), Berkley Group (2.77%) and ITV (2.45%) are leading the pack on the UK index on Monday with solid gains.
Just Eat (-3.09%), Entain (-0.91%) and National Grid (-0.75%) are the top fallers on the FTSE 100 on Tuesday.