You are here

Europe: Stocks extend gains


[LONDON] Europe's main stock markets rose further on Tuesday, with traders expecting Britain to vote to stay in the European Union despite polls putting the race neck and neck.

"It appears markets have made up their mind which way the referendum will go," said Jasper Lawler, market analyst at traders CMC Markets, although the findings of polls published Tuesday showed the referendum could still go either way.

"But before the result is known, there is still two-way risk" ahead of Thursday's landmark vote.

World stock markets had surged Monday, with Europe's leading indices advancing between 3.0 and 3.5 per cent, on growing expectations that Britain would Thursday vote to remain part of the EU.

Market voices on:

London's benchmark FTSE 100 index closed 0.4 per cent higher Monday.

Britain's pound made modest gains after soaring against the US dollar on Monday, although it later gave most of those up.

Sterling still hit a five-month high against the US dollar at US$1.4783, while it struck a three-week strong point of 76.54 pence to the euro.

Billionaire George Soros, who famously profited by betting against the pound in a 1992 currency crisis, meanwhile predicted a plunge in sterling should Britain vote to leave the 28-nation bloc.

In the eurozone, Frankfurt's DAX 30 index grew 0.5 per cent and the CAC 40 in Paris won 0.6 per cent, as data showed investor confidence in Europe's biggest economy Germany hit a nine-month high.

The investor confidence index calculated by the ZEW economic institute jumped by 12.8 points to 19.2 points in June, its highest level since September 2015, the think tank said in a statement.

"The improvement of economic sentiment indicates that the financial market experts have confidence in the resilience of the German economy," said ZEW president Achim Wambach.

"However, general economic conditions remain challenging. Apart from the weak global economic dynamics, it is mainly the EU referendum in Great Britain which causes uncertainty," Mr Wambach added.

Asian stock markets meanwhile mostly rose again Tuesday, playing catch up with Europe's strong gains the day before and following advances on Wall Street.

The gains were a reversal from last week, when polls showing an advantage for the "Leave" camp sparked big declines.

"It's about the momentum shift, the reversal of the momentum of the 'Leave' camp in the Brexit debate shifting to the 'Remain' camp," said Art Hogan, chief market strategist at Wunderlich Securities.

US stocks were mixed nearing midday after Federal Reserve Chair Janet Yellen reiterated the central bank has a cautious approach to gradually raising interest rates and warned of risks if Britain votes to leave the European Union.