Investing.com - European stocks opened sharply higher on Tuesday, as markets digested Britain’s shock decision to leave the European Union and market sentiment began to improve around the globe.
During European morning trade, the EURO STOXX 50 jumped 2.53%, France’s CAC 40 rallied 2.39%, while Germany’s DAX 30 surged 2.32%.
Market sentiment was hit after the U.K. voted by nearly 52% to 48% last Thursday to break away from the world's biggest trading bloc.
Investors fear that the decision could hit investment in the U.K. economy, threaten London's role as a global financial capital and trigger months of political uncertainty after British Prime Minster David Cameron resigned on Friday.
An European summit was scheduled in Brussels later Tuesday. Pressure was expected to be applied to the U.K. to trigger Article 50 which sets in motion the process of withdrawing from the EU.
Financial stocks were broadly higher, as French lenders Societe Generale (PA:SOGN) and BNP Paribas (PA:BNPP) surged 2.84% and 4.21%, while Germany’s Commerzbank (DE:CBKG) and Deutsche Bank (DE:DBKGn) rallied 2.17% and 3.32%.
Among peripheral lenders, Italy’s Intesa Sanpaolo (MI:ISP) and Unicredit (MI:CRDI) soared 5.16% and 6.08% respectively, while Spanish banks Banco Santander (MC:SAN) and BBVA (MC:BBVA) climbed 3.79% and 2.60%.
Allianz (DE:ALVG) added to gains, with shares up 3.70% following reports Indian financial services company Bajaj Finserv Ltd is likely to buy out the German company’s stakes in two of their insurance joint ventures, Bajaj Allianz Life Insurance Co Ltd and Bajaj Allianz General Insurance.
In London, FTSE 100 rallied 2.27%, led by G4S (CO:G4S), whose shares skyrocketed 10.61% after analysts at Goldman Sachs (NYSE:GS) upgraded the stock to an “outperform” rating.
U.K. lenders were also sharply higher, as HSBC Holdings (LON:HSBA) jumped 1.62% and the Royal Bank of Scotland (LON:RBS) rallied 3.04%, while Lloyds Banking (LON:LLOY) and Barclays (LON:BARC) soared 5.50% and 6.17% respectively.
Meanwhile, mining stocks were mixed. Rio Tinto (LON:RIO) climbed 3.24% and Glencore (LON:GLEN) surged 3.97%, while rivals Fresnillo (LON:FRES) dropped 0.41% and Randgold Resources (LON:RRS) slumped 0.81%.
Legal & General Group PLC (LON:LGEN) added to gains, with shares up 8.48% after the insurer Legal & General sought to reassure shareholders in the wake of the UK’s vote to leave the European Union, saying that long-term trends such as an ageing population are unaffected by the vote.
In the U.S., equity markets pointed to a sharply higher open. The Dow Jones Industrial Average futures pointed to a 1.11% jump, S&P 500 futures a 1.02% rally, while the Nasdaq 100 futures indicated a 1.07% climb.