LONDON - London share prices surged on Wednesday, wiping clean post-Brexit result losses, in the second straight day of a global recovery following a sharp sell-off sparked by Britain’s vote to quit the EU.

London’s benchmark FTSE 100 closed well over three percent higher and above its June 23 closing level, with a weaker British pound likely helping boost companies non-UK profits.

Paris and Frankfurt shares also pulled off strong increases, bouyed by a firmer Wall Street and Asian markets that earlier led the way on hopes that authorities will unveil fresh stimulus to counter the effects of Britain’s bombshell result.

However analysts warned of possible further jitters on the markets, given the many unknowns still about Britain’s path ahead as it handles its exit from the bloc and dealings with its EU partners.

“First the panic effect, then the rebound. That’s a well-known mechanism on financial markets,” said Christopher Dembik, an economist at Saxo Banque in Paris.

“But we also know that, after the rebound, volatility can re-emerge, and that is the main risk right now,” he said.

“The markets aren’t calm, we are in the eye of the storm,” said Adam Jepsen at Financialspreads, adding that “not a single issue” had been resolved.

“I will be surprised if the markets remain calm for more than a day or two,” he said.

Symptomatic of Brexit’s still uncertain impact, British telecoms giant Vodafone warned that the future of its London-based headquarters was now in doubt.

Ahead of London’s close, Oanda’s Craig Erlam had highlighted that the FTSE was closing in on Thursday’s closing level , describing it as “quite extraordinary” in view of Friday’s initial sell-off.

“The weakness in the pound will be helping considerably given how much of the FTSE’s profits are generated outside of the UK,” he said in a note to clients.

The British pound rose to $1.3501, after plunging to Monday’s 31-year-low of $1.3121.

Moneycorp dealers said sterling did “at last seem to have exhausted the supply of aggressive sellers”.

European debt markets also showed signs of calming down.

Money flowed out of safe-haven German government bonds into sovereign bonds on the eurozone’s southern periphery, with Spanish and Italian bond yields easing and those in Germany edging higher.

“The excesses seen after Brexit are slowly being corrected,” analysts at BNP Paribas said, adding that the German 10-year government yield, although still negative, could be heading towards -0.05 percent from Wednesday’s -0.10 percent.

Asia’s gains built on the previous day’s advance, after South Korea unveiled a $17-billion (15.3-billion-euro) plan to support its already fragile economy and news emerged that Japan was considering a similar move.

Before the Tokyo exchange opened, Prime Minister Shinzo Abe, Finance Minister Taro Aso and Bank of Japan chief Haruhiko Kuroda held talks on containing the Brexit crisis.

Japan’s Nikkei ended 1.6 percent higher, Shanghai gained 0.7 percent by the close, while Hong Kong finished up 1.3 percent.

- ‘Unnerving calm’ -

Stephen Innes, senior trader at OANDA Asia Pacific, warned: “This relative calm is unnerving, given how fragile investor sentiment is, and the likelihood of renewed (pound) volatility.

“As a result, FX markets should remain a hot spot for the foreseeable future. Liquidity is gradually improving and appears to have weathered the initial Brexit sell-off.”

Attention is now on how Britain negotiates its way out of the EU after four decades of partnership.