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Market rallies to two-month high after poll points to marginal lead for Remain

Published 23/06/2016

The FTSE 100 Index was up 39.3 points at 6,300.5
The FTSE 100 Index was up 39.3 points at 6,300.5

T he 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 6338.1 as the Ipsos Mori survey for the Evening Standard showed the referendum result was on a knife-edge, with 52% wanting to stay in the European Union and 48% pushing for Brexit.

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

British Airways owner IAG saw its share price soar more than 3%, 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 US dollars.

The pound was trading up 0.1% to 1.48 US dollars after stronger manufacturing and employment data from the US caused the dollar to strengthen. The pound was down 0.4% 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%.

Oil majors were also helping to lift the London market after the price of oil stepped up 1.1% to 50.4 US dollars a barrel amid easing Brexit concerns.

Royal Dutch Shell B was up 3%, or 56.5p, to 1889p, while rival BP lifted just shy of 1% 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 Britain 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 2735p.

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.

Supermarket giant 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%, after a 0.9% uptick in the previous period. It is the first time in more than five years that Tesco has reported two back-to-back 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%, or 121p, to 4191p.

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 1889p.

The biggest fallers were Paddy Power Betfair down 415p to 8700p, United Utilities down 24.5p to 932.5p, Burberry Group down 24p to 1109p, Diageo down 9.5p to 1833p.

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