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Shares and sterling bounce back as Brexit concerns ease

Published 17/06/2016

The FTSE 100 Index was 68.3 points ahead at 6018.7
The FTSE 100 Index was 68.3 points ahead at 6018.7

The London market broke back through the 6,000 mark as banks and housebuilders surged amid easing concerns over a British exit from the European Union.

The FTSE 100 Index was 70.6 points ahead at 6021.1 as investors felt the Remain camp could benefit after all referendum campaigning was suspended following the tragic killing of Labour MP Jo Cox.

Investors jumped out of safe havens and dived back into housebuilders and financial firms, which had taken a pummelling in previous sessions amid fears that a Brexit vote would hit their sectors the hardest.

Gold Miner Rangold Resources tumbled more than 4%, while Lloyds Banking Group and Taylor Wimpey climbed 6% and 4% respectively.

Sterling was up 0.5% against the dollar at 1.428, as it bounced back from losses in previous sessions following the death of the West Yorkshire MP.

The upwards move came despite the latest Survation/IG poll showing the number of people backing Brexit had risen seven points to 45% since May.

Analyst Colin Cieszynski, of CMC Markets, said the way the market had reacted to the death of Mrs Cox, a Labour MP and Remain supporter, had disappointed him.

"There are lots of ways to make money in the markets so I'm not one for profiting on the misfortunes and tragedies of others.

" The murder of UK Labour MP Jo Cox, a proponent for remaining in the EU, in what appears to have been a politically motivated act (details are still sketchy at the time of writing) sent shockwaves through world markets," he said.

Across Europe, Germany's Dax was trading 0.8% higher, while the Cac 40 in France stepped up 0.9%.

Benchmark London Brent crude was back on the rise after sinking 3.4% at the close of Thursday's session.

The price of oil was 3% higher at 48.59 US dollars a barrel, stepping up for the first time in seven days as the markets paused for breath after the recent Brexit-led declines.

In stocks, banking giant HSBC managed to rise 4.7p to 431.2p despite its finance unit having to fork out almost 1.6 billion US dollars (£1.1 billion) to settle a long-running legal case linked to its acquisition of Household International in 2003.

The 14-year-old class action has seen shareholders in Household accuse HSBC Finance Corporation of misleading them over lending practices and of inflating its share price.

Britain's biggest supermarket, Tesco, was ahead after selling Dobbies Garden Centres for £217 million, as the grocery giant continues to shift focus back to its supermarkets by offloading non-core assets.

Dobbies, the UK's second largest garden retail chain, has been snapped up by investors led by Midlothian Capital Partners and Hattington Capital.

Tesco chief executive Dave Lewis said: "It was a difficult decision to sell the business, but we believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths."

Shares were 1.7p higher at 154.4p.

The biggest risers on the FTSE 100 Index were Lloyds Banking Group up 3.7p to 65.1p, Standard Chartered up 27.5p to 526.2p, TUI up 45.5p to 1006p, Barclays up 7.3p to 165.8p.

The biggest fallers were Rangold Resources down 315p to 6610p, Unilever down 37p to 3069p, Shire down 43p to 3956p, Glaxosmithkline down 11.5p to 1387.5p.

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