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Insurer stocks rally after post-Brexit slump

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(Reuters) — Britain's top share index bounced back on Tuesday following two straight sessions of steep losses as insurers and banks, hit hard in the aftermath of Britain's decision to leave the European Union, led the market higher.

The FTSE 100 index closed 2.6% higher at 6,140.39 points, with all but nine stocks trading in positive territory.

It had fallen more than 5% in the last two sessions after the Brexit vote, wiping nearly £100 billion ($136.76 billion) off the value of blue-chip firms. Britain suffered further blows on Monday as ratings agencies cut their sovereign credit score.

The U.K. Life Insurance index, which plunged more than 20% in the past two sessions, surged 6.4% and recorded its biggest one-day percentage gain since late 2011, led higher by a 7.7% jump in Prudential P.L.C.

Shares in Legal & General Group P.L.C. rose 7.9%, after it said its balance sheet had proved resilient to the Brexit vote and it had trimmed its exposure to riskier assets beforehand. Aviva P.L.C., Standard Life P.L.C. and Old Mutual P.L.C. rose 3.4% to 5.7%.

"Equities look to have found their footing post-Brexit despite political turmoil in Westminster," Mike van Dulken, head of research at Accendo Markets, said. "Bargain-hunting may be helping as opposed to emergence of genuine support as markets adjust to a new normal and the prospect of the U.K. outside the European Union."

The banking index rallied 2.9% after slumping 16.4% in two days, with some investors taking advantage of weaker share prices. Travel and leisure stocks rose 1.6% after a 12% slump.

The midcap FTSE 250 rose 3.6% after the domestically focused index's 13.7% slump since Thursday. Shares in Ocado Group P.L.C. were up 8.6% after the food retailer reported a profit rise.

"Online supermarket Ocado continues to prosper with the group gaining market share on the seemingly inexorable rise of the armchair shopper," AJ Bell's investment director, Russ Mould, said.

"Ocado is benefiting from its tie-up with Morrisons and pretax profits are increasing, albeit at a slower rate, despite price deflation," he said.

Shares in British challenger bank Shawbrook Group P.L.C. fell more than 14%, however, after it said it expected to book an additional impairment charge due to some irregularities in its asset finance business and that CFO Tom Wood had resigned.

For more of Business Insurance's ongoing coverage of the historic 'Brexit' vote, click here.