Bloomberg

(Bloomberg) -- European stocks advanced, snapping their worst two-day losing streak since 2008, as investors speculated that policy makers may take action to shore up markets after the recent rout.

The Stoxx Europe 600 Index rose 2.3 percent to 315.81 at the 8:08 a.m. in London. European stocks extended losses yesterday amid growing uncertainty surrounding the fallout from Britain’s shock vote to leave the European Union. The FTSE 100 also recovered 2.3 percent today. The volume of European shares changing hands was twice the 30-day average, while for British equities, it was more than twofold.

EU leaders gather in Brussels today for the start of a two-day European Council summit to discuss Britain’s decision to leave the bloc. Investors will also look to the Federal Reserve’s response after Chair Janet Yellen warned of the damage a Brexit would cause. 

Fed Funds futures indicate little chance the U.S. central bank will raise interest rates by February, but an almost 23 percent likelihood of a cut as soon as September. Prior to the U.K.’s referendum, there was zero prospect of a reduction and a 52 percent chance of an increase.

It’s been a wild ride for European equities in the past few weeks, with the Stoxx 600 falling to its lowest level since February before rebounding 7.8 percent in the five days through last Thursday as volatility surged in the run-up to the vote. The index is now heading for a 9 percent decline in June, it’s worst monthly performance since August 2011.

Italian lenders led a measure of banks on the Stoxx 600 to a 2.8 percent gain, after it fell yesterday to its lowest level since November 2011.

Among stocks moving on corporate news, Nestle SA advanced 2 percent after naming Ulf Mark Schneider as successor to Chief Executive Officer Paul Bulcke, handing the reins of the world’s biggest food company to an outsider for the first time in nearly a century. Redrow Plc jumped 8.6 percent after forecasting that full-year profit may beat analysts’ estimates.

To contact the reporters on this story: Alan Soughley in Frankfurt at asoughley@bloomberg.net, Camila Russo in Madrid at crusso15@bloomberg.net. To contact the editors responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net, Alan Soughley

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