While you were sleeping: UPDATED Shares, oil extend post-Brexit rally

Global equities extended their post-Brexit rally amid bets central banks will help ease the impact on the global economy and corporate profits after the UK's decision to leave the European Union.

"There are reasonable expectations from central banks globally, especially from the US Federal Reserve, the European Central Bank and the Bank of England, to provide more liquidity, guidance and clarity to support markets," Stephen Wood, chief market strategist at Russell Investments in New York, told Reuters.

Meanwhile, the US dollar fell amid bets the Fed won't raise interest rates any time soon and that it might actually cut them instead to ease the Brexit turmoil.

In Europe, the Stoxx 600 Index ended the day with an increase of 3.1% from the previous close. Germany's DAX index rose 1.8% and France's CAC 40 index jumped 2.6%. 

London’s FTSE 100, made up of companies that earn three-quarters of their revenues outside the UK, gained 3.6%, erasing all its post-Brexit losses. The more UK-focused FTSE 250 also rallied, climbing 3.2%.

"The counter-movement to the heavy losses after the Brexit shock show that perhaps some realism is starting to set back in, or perhaps there is hope for an adequate solution," Frankfurt-based Equinet trader Bank Thorsten Engelmann told Bloomberg.

"We still don't know whether a new referendum would be an option for the UK, or whether there's a way to go around it."

Dow gains 285 points
Wall Street moved higher, too. At the close, the Dow Jones Industrial Average was up 284.96 points, or 1.6%, to 17,694.68. The Nasdaq Composite Index rallied 1.9% to 4779.25 and the Standard & Poor's 500 Index also gained 1.9% to 2070.77.

American Express gained the most in the Dow industrials, climbing 3.2%, while Nike rose 3% and JP Morgan Chase rose 2.6%. Shares of Home Depot slipped 0.2 % for the only percentage decline.

Oil prices soared 4.2% to $US49.88 a barrel, also lifting energy shares, after the US government reported a larger than expected weekly decline in crude inventories.

Monsanto rose 2.6% higher after the world's largest seed company said it was still in talks with Bayer and others about "alternative strategic options." Last month Monsanto rejected Bayer's $US62 billion takeover offer.

"While there is no formal update on the Bayer proposal, I have been personally in discussions with Bayer's management over several weeks, along with others regarding alternative strategic options," Monsanto's chief executive Hugh Grant says.

Monsanto reported lower than expected profit and sales for the third quarter. It also says full-year earnings will be at the low end of its previously announced target range.

The results may lead to a "more conciliatory tone" in merger talks, with the next steps being a "modestly better proposal" from Bayer with detailed breakup and regulatory provisions, Jefferies analysts say in a report.

(BusinessDesk)