UK shares and the pound have continued to regain some of the ground lost in the wake of the Brexit vote.
After rising 2.6% on Tuesday, the FTSE 100 share index was up 2.1% at 6,271.48 by mid-morning.
The pound rose 0.3% against the dollar to $1.3383, although sterling still remains well below levels reached before the referendum.
Analysts also warned that the rally of the past couple of days might be short-lived.
"Stocks and the pound are continuing to firm but the post-Brexit reality will bite sooner or later," said Joe Rundle, head of trading at ETX Capital.
"What we're seeing in the FTSE is hope in Britain being able to ride it out by remaining part of the single market. This looks like wishful thinking."
The market moves come as European Union leaders are meeting for a second day at a summit in Brussels.
The leaders are gathering without the UK after its vote to leave the bloc. On Tuesday, David Cameron said continued trade and security co-operation with the EU would be vital.
Over the worst?
The pound had risen as high as $1.50 on Thursday as traders anticipated a 'Remain' vote, but by Monday it had plunged to a 31-year low against the dollar.
Sterling rose 0.4% against the euro on Wednesday to about €1.21. Before last week's referendum it had been trading around €1.30.
Image copyright Reuters
At the close of trade on Thursday last week, the FTSE 100 stood at 6,338.10. However, in the volatile trade following the referendum result the index had dropped 5.6% by the end of Monday.
The FTSE 250 - which contains more UK-focused companies - slumped 13.7% in the two trading sessions following the referendum result. On Tuesday, it rose 3.6% and the index was 1.4% higher on Wednesday.
Shares in Asia continued to rise on Wednesday, and stock markets across Europe were also higher. Germany's Dax index rose 1.5% while France's Cac 40 was 2.1% higher.
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