Monday, 20th June: With 3 days to go till the UK referendum, polls from over the weekend have put the ball firmly back in the “remain” camp, and global markets followed the optimism. The FTSE 100 has spent the day very much in the green, leading by more than 3.5% in mid afternoon trading. The FTSE 250 followed the same trend, whilst markets in France and Germany also felt the benefit of the turn in events. There is now a 74% chance of Britain to remain in the EU, a large swing after the “leave” campaign reached 44% last week. Top bosses in the UK including Sir Richard Branson warned a British exit would be “devastating”, whilst Premier League chair Richard Scudamore (who became the voice of 20 clubs) said that the top 20 teams in England wanted to remain in the EU.
Campaigning had been suspended till yesterday following the tragic events on pro-EU lawmaker Jo Cox on Thursday. The four polls that were released over the weekend had all been compiled, or at least the majority of responses had been logged before Thursday’s event. The Sunday Times poll of yesterday revealed 33% thought they would be worse off should Britain leave the EU, up from 23% a fortnight ago.
Sterling also gained strength on the back of the “remain” momentum. It gained more than 2% vs the US dollar as the green note fell to its lowest vs the pound since the end of May. GBP/USD is currently +2.25% at $1.47 whilst GBP/EUR is +1.89%. The jump in the pound is the biggest gain vs the dollar in more than 7 years.
Gold has recently jumped on fears that the UK would leave the EU, gaining more than 8% month-to-date as it reached $1313.36/oz in intra-day trading on Thursday. However, following the aforementioned weekend polls, gold prices lagged, trading at $1285.71/oz at the time of writing as investors shied away from the “safe-haven” asset. Reflecting the fall in the precious metal, Randgold Resources sat comfortably at the bottom of the FTSE 100, trading lower by 1.44%. It was one of only three stocks to end the day in the red.
The biggest winner on the main London market was Hargreaves Lansdown who led by nearly 8%. Other big winners were the Banks as Lloyds and RBS both ended the day >+7%. Large UK house builders Taylor Wimpey and Barratt Developments also led with >+6%.
At the close all main indices in Europe ended the green: the FTSE +3.04%; the CAC 40 +3.50% and the DAX +3.43%. Sentiment isn’t quite as strong in the US as the S&P 500 and Dow Jones lead by 1.03% and 1.05% respectively.