Stocks rally anticipating Remain vote on EU

LONDON

THE London market rallied to a two-month high after the final poll of the referendum campaign pointed to a marginal lead for the Remain camp.

The FTSE 100 Index was 76.9 points ahead at 6,338.1 as the Ipsos Mori survey for the Evening Standard showed the referendum result was on a knife-edge, with 52 per cent wanting to stay in the European Union and 48 per cent pushing for Brexit.

Blue-chip miners, banks and travel firms all raced ahead as investors remained confident the UK would vote to remain in the EU.

British Airways owner IAG saw its share price soar more than 3 per cent, or 18.5p, to 528p, as traders expected the airline business to be boosted by a pro-Europe result. Anglo American rose 24.2p to 694.7p, while Barclays and HSBC climbed 4.9p to 186.9p and 10.5p to 454.5p respectively.

However, sterling ran out of steam towards the end of the day after reaching a high for the year at $1.49.

The pound was trading up 0.1 per cent to $1.48 after stronger manufacturing and employment data from the US caused the dollar to strengthen. The pound was down 0.4 per cent against the euro at €1.30.

European markets also pushed higher, with Germany’s Dax and France’s Cac 40 both surging around 1.9 per cent.

Oil majors were also helping to lift the London market after the price of oil stepped up 1.1 per cent to $50.40 a barrel amid easing Brexit concerns. Royal Dutch Shell B was up 3 per cent, or 56.5p, to 1,889p, while rival BP lifted just shy of 1 per cent or 3.6p to 386.9p. In stocks, the London Stock Exchange was among the biggest risers as its £21 billion tie-up with Deutsche Borse looked more certain of going ahead.

A report by the Economist Intelligence Unit earlier this month said the deal could collapse if the UK voted for Brexit, with the erection of barriers to cross-border capital markets transactions and a lack of political support making the merger unworkable. Shares were up 81p to 2,735p. Defence giant BAE Systems finished 1.5p ahead at 504p despite making early falls after it was handed a broker downgrade – from buy to hold – by Berenberg.

Tesco rose 1.4p to 167.8p as it notched up its second consecutive quarter of UK sales growth.

Like-for-like sales in the first quarter of the year rose 0.3 per cent, after a 0.9 per cent uptick in the previous period. It is the first time in more than five years that Tesco has reported two successive quarters of UK sales growth.

Tesco also said it will sell its Harris and Hoole coffee chain to Caffe Nero in the latest of a series of disposals as the grocer focuses on its core supermarket business.

Costa Coffee owner Whitbread was also ahead on news of the deal, rising just under 3 per cent, or 121p, to 4,191p.

The biggest risers on the FTSE 100 Index were IAG, up 18.5p to 528p; Anglo American, up 24.2p to 694.7p; Antofagasta, up 15.3p to 440.3p; Royal Dutch Shell B, up 56.5p to 1,889p. The biggest fallers were Paddy

Power Betfair, down 415p to 8,700p; United Utilities, down 24.5p to 932.5p; Burberry Group, down 24p to 1,109p; and Diageo down 9.5p to 1,833p.

NEW YORK

STOCKS rallied on Wall Street, led by bank shares, as traders bet strongly the UK would vote to remain part of the European Union, potentially avoiding a hit to European trade and its consequences to global economic growth.

The Dow Jones industrial average rose 230.24 points, or 1.29 per cent, to 18,011.07, the S&P 500 gained 27.87 points, or 1.34 per cent, to 2,113.32 and the Nasdaq Composite added 76.72 points, or 1.59 per cent, to 4,910.04.

The Dow industrials closed back above 18,000 and at its highest since April 27. The financial sector led the S&P 500 with a 2.1 per cent gain.

The CBOE Volatility index fell 18.5 per cent, its largest daily per centage decline since October 2013.

Earlier, US jobless claims and factory data pointed to a strengthening economy.

Given the improving economic backdrop, the S&P 500 could hit a record high in the next few days if the UK has decided to stay in the EU.The S&P 500 closed 0.8 per cent below its record closing high hit May last year.

Software maker Twilio Inc nearly doubled in its market debut, rising as high as $29.60 after pricing at $15. It closed up 91.9 per cent at $28.79. Micron Technology added 10.5 per cent at $14.05 in more than three times the average daily volume of the past 10 days.

About 6.4 billion shares changed hands in US exchanges, below the 6.8bn average over the past 20 sessions.