Thursday 29 September 2016

European stocks advance as Brexit fears soften

Published 23/06/2016 | 02:30

A man looks at a board showing currency exchange rates outside a Bureau de Change in North London, as holidaymakers heading abroad this summer have been flocking to snap up their travel money ahead of tomorrow's EU Referendum. Photo: PA
A man looks at a board showing currency exchange rates outside a Bureau de Change in North London, as holidaymakers heading abroad this summer have been flocking to snap up their travel money ahead of tomorrow's EU Referendum. Photo: PA

European stocks climbed as investors reckoned that the UK will choose to remain in the European Union in today's referendum, while an increase in commodity prices boosted miners.

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By mid-afternoon in Dublin, the ISEQ Overall Index was up 0.32pc, or 19.92 points, to 6,273.72.

The leaders on the Dublin market included fruit company Fyffes, which increased 1.3pc to €1.51, while building materials group CRH rose 0.9pc to €26.78.

On the other side of the board, the laggards included drinks group C&C, which by mid-afternoon had fallen 0.6pc to €3.81.

Speciality baker Aryzta slipped 0.2pc to €35.12.

The National Asset Management Agency also revealed that it had redeemed a further €1bn of senior debt bringing to 85pc the total it has paid back to date.

Elsewhere, Glencore rose 2.8pc, leading a gauge of miners to the best performance of the 19 industry groups on the Stoxx Europe 600 Index, as base metals climbed.

RSA Insurance Group paced insurers higher after Barclays said the company is confident of meeting its 2018 targets and well placed in the event of a Brexit.

Total contributed the most to gains among energy producers as crude traded above $50 a barrel.

The Stoxx 600 rose 0.5pc to 341.6 by mid-afternoon in London. Shares capped their biggest three-day advance in almost 10 months on Tuesday after surveys showed the UK campaign to stay in the EU moving ahead.

While newer polls were split on the outcome, betting shops are placing the odds for 'remain' at about 80pc, according to Oddschecker data.

They see only a one-in-four chance of a secession.

The FTSE 100 Index gained 0.6pc.

"It's clear that betting odds are skewed towards 'remain' at the moment, which is the main data the market will be moving on until there is a clear outcome," said Daniel Murray, head of research at EFG Asset Management in London, which oversees about $12bn in assets.

"Even so, 'remain' is not completely priced in as the costs of a 'leave' could be quite large.

"The biggest risk is waking up on Friday to an uncertain result."

The Stoxx 600 began a rebound last Friday as Brexit concern eased amid a suspension in campaigning following the killing of Labour Party MP Jo Cox.

The equity gauge has struggled to maintain momentum after rallying 16pc from a February low to an April 20 high.

It's still down 1.7pc in June, on track for its first monthly drop in four.

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