If June 23^rd was a surprise for you, it is more than likely that the shocks to stock markets that followed on the 24^th could have been even more so. However, fast forward two months and markets have not only posted a better-than-expected recovery from the lows of late June, but many UK Index companies are now trading as if Brexit never happened.

Some retail investors, seeing the potential negative impact of a vote to leave the EU on the markets, chose not to weather the storm of the referendum and closed out positions in May. This would initially have been the right decision given the sharp sell off. However, the rebound has been impressive to say the least.

In the immediate aftermath of Brexit, predictions of a subsequent technical recession were rife, and rightly so. A majority of UK share prices tumbled by much more than 5% over a single day’s trading and the UK Index lost almost 600 points overnight. Many may be forgiven for having flashbacks to the events of 2008: Even Bank of England Governor Mark Carney has stated that, having experienced what is now dubbed ‘The Great Recession’, at the time he regarded Brexit as potentially being an event of a similar economic impact.

Yet now we are seeing a healthy post-Brexit bounce. UK Index shares have enjoyed a tremendous rebound since June as investment volume increases have flooded the market after the volatile Summer.  66% of UK 100 listed companies have recovered to trade above their pre-Brexit prices, whilst a further 29% have traded all-time highs since the referendum.

No one would blame you for thinking that this may not last as markets try to counteract the severe losses of June. Challenges still remain as central banks look to overcome low inflation rates and upcoming political elections in the US and Eurozone continue to divide domestic populations over which direction to take their countries.

However, the future remains bright. A strengthening US economy has brought about the potential for global interest rates to increase for the first time in almost a decade later this month; macroeconomic data from the UK has showed less of an impact from Brexit than previously predicted; once again, investors can enjoy seeing positive returns in a less volatile trading environment.

At the highest point of trading before the referendum the UK Index was trading around 6300. While it may have dropped to 5700 on 24th June, an impressive 1000 point recovery has ensued. Now the UK Index is trading around 6800 bullish investors are hoping that strong performances from UK Housebuilders and Energy sectors will help the index challenge the hallowed 7000 mark over the coming weeks.

For retail investors, the surprise result of June 24^th could have been perceived as a sign to quit the market and, as a result, may have forced the hand of many to close out their positions. The ‘sell in May’ adage may also have seemed the right call at the time. Yet in early September, those with strong nerves (and a savvy broker, such as Accendo Markets) are still seeing returns on their share holdings, having avoided incurring losses due to a premature sell off of their positions, even experiencing returns above and beyond those pre-Brexit.

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John Truong, Senior Trader (9th September)