The London stock market and the pound bounced on Thursday after British Prime Minister Liz Truss announced her resignation following disastrous policies that rocked the markets for weeks.

The pound traded around 0.4 percent higher against the dollar to $1.1273 after Truss ended six tumultuous weeks in power — but analysts said gains were pared by the ongoing uncertainty.

The FTSE 100 Index was up 0.1 percent while the country’s borrowing costs eased on the news, as the yield on 30-year government bonds, known as gilts, fell to 3.94 percent.

“Sterling and gilts rallied as the sorry reign of Liz Truss came to an end,” said Markets.com analyst Neil Wilson.

“After a flurry of activity we are seeing retracement of these initial moves as markets realize that there’s still huge uncertainty about whether the Tory party can survive in power.”

Wilson warned the government’s “economic policies were already dead in the water so the market doesn’t have a huge amount of genuine new information to move on.”

The government had teetered on the brink of collapse after the resignation of home secretary Suella Braverman Wednesday.

On Thursday, Truss announced that she “cannot deliver the mandate on which I was elected.”

It comes days after the sacking of finance minister Kwasi Kwarteng and the dismembering of her government’s debt-fueled budget that had sparked chronic markets turmoil.

“Although the resignation of Liz Truss as Prime Minister leaves the UK without a leader when it faces huge economic, fiscal and financial market challenges, the markets appear to be relieved,” said Paul Dales, chief UK economist at Capital economics.

The recovery seen Thursday was due to “the markets… further pricing out the risk premium that the Truss government generated.”

There was still plenty of caution towards the UK.

“While this has brought about a brief respite to the political risk premium it’s hard to see how any replacement will be able to coalesce around any form of unity of policy in this dumpster fire of a government,” said Michael Hewson, chief market analyst at CMC Markets.

– Strong dollar, China fears –

Elsewhere, US and European markets rallied a day after losses over persistent concerns over soaring inflation, interest rate hikes and looming recessions.

Wall Street opened higher while eurozone markets were also higher in afternoon deals.

The haven dollar soared above 150 yen for the first time since 1990 before falling back slightly — stoking speculation that Japanese authorities could intervene again to support the battered currency.

The greenback also rallied to a record high at 7.2790 against the offshore yuan, with the US unit boosted by the Federal Reserve’s aggressive interest rate hikes.

Asian markets finished the day in the red, with selling also fueled by concerns about the Chinese economy as Covid cases spike in the country and leaders stick to lockdown strategies.

A decision to delay the release of China’s third-quarter economic growth data this week added to unease.

Oil extended Wednesday’s rally that came in reaction to a drop in US petroleum stockpiles, and despite President Joe Biden’s decision to release 15 million barrels from US strategic reserves.

– Key figures around 1400 GMT –

London – FTSE 100: UP 0.2 percent at 6,941.17 points

Frankfurt – DAX: UP 0.1 percent at 12,759.03

Paris – CAC 40: UP 0.5 percent at 6,074.67

EURO STOXX 50: UP 0.4 percent at 3,484.60

New York – Dow: UP 0.7 percent at 30,665.29

Tokyo – Nikkei 225: DOWN 0.9 percent at 27,006.96 (close)

Hong Kong – Hang Seng Index: DOWN 1.4 percent at 16,280.22 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,035.05 (close)

Pound/dollar: UP at $1.1273 from $1.1219 on Wednesday

Dollar/yen: DOWN at 149.85 yen from 149.90 yen

Euro/dollar: UP at $0.9802 from $0.9773

Euro/pound: DOWN at 86.98 pence from 87.11 pence

Brent North Sea crude: UP 1.4 percent at $93.71 per barrel

West Texas Intermediate: UP 1.9 percent at $86.11 per barrel (AFP)

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