European Stock Markets Rally After Early Morning Bloodbath, Trump Concerns Ease

European stock markets closed higher on Wednesday after staging a strong recovery rally from late morning onward.

The headline news item for the day was undoubtedly the surprise election of Donald Trump in the U.S., which led to a bloodbath in equities after the market opened just a few hours following the result.

But the president-elect's conciliatory tone at a press conference soothed nerves among some European investors, who are still reeling from the Brexit vote in June, after he pledged to be a president for all Americans and called for rifts within the nation to be healed.

London's FTSE 100, which is heavily populated with dollar earners and had a number of companies report earnings before the market opened, was a relative laggard for the session. The blue-chip index closed 0.8% higher at 6,894.5 while the mid-cap FTSE 250 also came to rest some 0.8% higher at 17,574.5.

The DAX in Germany was the top performer among continental benchmarks, rising by 1.21%, to close at 10,608.7. This is while the CAC followed closely behind, up 1.12%, to close at 4,526.4. The Stoxx Europe 600 index, the broadest measure of European stocks, closed 1.4% higher at 339.7.

Currency markets were volatile during the session. Initially the dollar weakened markedly against the pound and the euro, but later pared losses.

The pound was trading around 1.2475 against the greenback at the time stock markets closed, a broadly similar level to Tuesday afternoon. The euro was a fraction lower against the dollar by the time the markets closed, at 1.0936.

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