London close: Financials and miners gain on eve of referendum

Shares of financials and miners continued their advance on the eve of the EU referendum, despite warnings from quite a few analysts that the result of Thursday's vote was too close to call.

The Footsie jumped 1.23% or 76.48 points to close at 6,303.03, with the mid-cap FTSE 250 index was up by 63.23 points or 0.37% to 17,043.54.

Sterling was up 0.22% the dollar at 1.4680 but down 0.23% versus the euro at 1.3001, with fresh Brexit opinion polls due out in late afternoon and the evening offering the potential for some sharper forex movements.

Indeed, the first of those, from Opinium, put support for the 'Leave' camp at 45% versus 44% of respondents backing 'Remain'.

Financial and betting markets were pricing in a high probability of a 'Remain' vote, but the outcome was still “highly uncertain”, Credit Suisse cautioned clients.

"Indeed, a 'Leave' vote might push the broker’s measure of risk appetite into “panic”, Credit Suisse said.

“The correlation between betting market odds and global risk appetite has been extraordinarily high in the past few weeks. That suggests an immediate, large and highly correlated move in both safe and risk assets once the outcome is clear,” analysts Anais Boussie, Peter Foley, Neville Hill, Sonali Punhani and Giovanni Zanni said in a research note sent to clients.

In case of ‘Leave’ coming out on top, the broker forecast a “shallow” recession unfolding in the UK, together with a slowdown in the euro area and easing measures from the Bank of England and European Central Bank.

Iron ore and steel prices continued to gain ground in overnight trading, amid signs of steady steel output globally and stockpiles in Chinese markets.

Global production of steel declined by 0.1% year-on-year in May, according to world steel data released on Tuesday and referenced by analysts at Macquarie.

To take note of, in its Article IV consultation with the US the International Monetary Fund said the greenback might be overvalued by between 10.0% and 20.0%.

In corporate news, department store chain Debenhams slipped lower after it revealed like-for-like sales fell in the third quarter and gross profit margins is likely to be flatter than previously thought. LFL sales were down 0.2% and full year profits are likely to be within the range of analyst forecasts, which many investors took to mean "at the bottom of the range".

Housebuilders Taylor Wimpey, Persimmon, Berkeley and Barratt Developments, all of which have been hit hard by concerns about the EU referendum, were among risers.

RSA Insurance, bolstered by a strong write-up from Barclays analysts, was near the top of the leaderboard, dragging peers Direct Line and Admiral and financial services group Hargeaves Lansdown, also indicating confidence about the result of Thursday's vote.

Shares in Associated British Foods were under the cosh after analysts at Morgan Stanley cut their stance on the stock and slashed the price target to 2,650p from 3,500p after taking a fresh look at Primark. The bank said that while Primark remains a great fast-fashion retail chain with attractive long-term growth prospects, its like-for-like sales have slowed to zero over the last 18 months or so.

Specialty chemicals company Elementis was a big faller after it issued a profit warning ahead of its interim results due to slower chromium sales. The FTSE 250 firm said that, as previously indicated, sales and contribution margins from the division in North America for the first six months of the year are expected to be similar to the prior year.

Market Movers

FTSE 100 (UKX) 6,261.19 0.56%
FTSE 250 (MCX) 17,043.54 0.37%
techMARK (TASX) 3,066.56 0.76%

FTSE 100 - Risers

Hargreaves Lansdown (HL.) 1,381.00p 4.07%
Old Mutual (OML) 193.40p 2.98%
Provident Financial (PFG) 2,846.00p 2.93%
Standard Life (SL.) 340.70p 2.81%
St James's Place (STJ) 909.00p 2.42%
Direct Line Insurance Group (DLG) 371.80p 2.20%
Experian (EXPN) 1,322.00p 2.16%
Standard Chartered (STAN) 566.70p 2.13%
RSA Insurance Group (RSA) 484.10p 2.09%
Aviva (AV.) 442.50p 2.03%

FTSE 100 - Fallers

Associated British Foods (ABF) 2,802.00p -3.41%
Antofagasta (ANTO) 425.00p -1.85%
Coca-Cola HBC AG (CDI) (CCH) 1,399.00p -1.69%
Randgold Resources Ltd. (RRS) 6,400.00p -1.01%
Imperial Brands (IMB) 3,630.50p -0.98%
Whitbread (WTB) 4,070.00p -0.93%
Marks & Spencer Group (MKS) 361.30p -0.74%
SSE (SSE) 1,538.00p -0.58%
SABMiller (SAB) 4,267.00p -0.45%
Compass Group (CPG) 1,301.00p -0.38%

FTSE 250 - Risers

Circassia Pharmaceuticals (CIR) 105.50p 8.76%
Shawbrook Group (SHAW) 294.60p 4.39%
OneSavings Bank (OSB) 337.00p 4.14%
Marshalls (MSLH) 315.00p 3.75%
Aberdeen Asset Management (ADN) 302.50p 3.60%
esure Group (ESUR) 271.40p 3.59%
NCC Group (NCC) 279.00p 3.53%
Lancashire Holdings Limited (LRE) 576.50p 3.41%
Cineworld Group (CINE) 589.50p 3.35%
Laird (LRD) 334.80p 3.24%

FTSE 250 - Fallers

Elementis (ELM) 208.70p -7.82%
Debenhams (DEB) 69.70p -6.13%
Synthomer (SYNT) 339.00p -4.78%
Genus (GNS) 1,503.00p -3.59%
Paysafe Group (PAYS) 380.80p -3.23%
Domino's Pizza Group (DOM) 1,010.00p -3.07%
Tritax Big Box Reit (BBOX) 131.80p -2.81%
Essentra (ESNT) 526.50p -2.50%
CMC Markets (CMCX) 275.40p -2.26%
Indivior (INDV) 224.60p -2.14%