London close: Market fixated on looming referendum

Stocks ended higher for a second day, with banks and insurers clocking in with the biggest gains as traders waited for Thursday's referendum.

The Footsie finished the day up by 0.73% or 45.24 points to 6,249.24.

The pound on the other hand was knocked lower from its intra-day highs after a poll for IG by Survation showed a strong gain for those backing a Brexit vote at Thursday's EU referendum.

The results of the Survation phone poll, published at 13:30 BST, showed the 'Remain' vote stayed at 45% compared to 44% for 'Leave', up two percentage points as the share of undecided voters shrank to 11%.

As of 16:55 BST cable was 0.17% lower at 1.4669, having an intra-day peak at 1.4670.

In comments posted to his Twitter account, US academic Nouriel Roubini warned that a decision to leave the UK could stall the British economy and tip it into recession.

Boosting investor sentiment throughout the day, a phone poll conducted by ORB on behalf of The Daily Telegraph revealed that 53% of respondents backed Remain, with 46% showing their support for 'Leave'. However, including undecided voters then Remain's lead was whittled down to just 49.0% against 47.0%.

A poll from YouGov carried out for The Times published on Monday evening put support for Remain at 44.0% and that for Leave at 42.0%.

According to Ladbrokes, the chances of a 'Remain' vote had shortened to 2/7, with about 95% of all bets over the previous 24 hours had been placed on voters rejecting Brexit.

On the data front, public sector net borrowing (excluding public sector banks) printed at £9.7bn for May (consensus: £9.5bn), less than the £10.1bn seen one year ago.

Following an upwards revision to April's tally of £1bn, UK state borrowings over the first two months of the fiscal year were 0.8% higher than a year before, versus a forecast from the Office for Budget Responsibility for a decline of 23.0% over all of fiscal year 2016/17.

The Confederation of British Industry's total orders balance improved from -8 in May to -2 in June (consensus: -10.0).
That indicated that the downturn in manufacturing had drawn to a close, but it remained difficult to be upbeat about the sector’s outlook, analysts at Pantheon Macroeconomics said.

In corporate news, Whitbread served up a slight improvement in sales in the first quarter of the year as its Costa coffee shops bounced back from a slowdown in the preceding few months.

Group like-for-like (LFL) sales grew 1.8% as although Costa's sales were up 2.6%, the group's Premier Inn hotel chain saw LFL sales slow further to 2.1% from the rate seen in the fourth quarter.

BHP Billiton said it was targeting another $600m in coal production costs by the end of the 2017 financial year.

The mining group also increased its forecast for coal output for the current year to 43m tonnes, with plans to lift production to 46m tonnes in 2018.

"While cost compression has been evident across the industry, we continue to work hard under our new operating model to improve our performance," said BHP Billiton Minerals Australia president Mike Henry.

"Even in today's difficult environment, all of our operations remain cash positive."

Saga said it was on track to achieve its targets for the year ending 31 January 2017 and continues to make good progress against its strategic priorities.

Ahead of its annual general meeting at its headquarters in Folkestone, chief executive officer Lance Batchelor said: “We have made a good start to the year across our core trading divisions. We continue to focus on our strategic objectives and remain on track to deliver on the targets we set out at our preliminary results on 19 April 2016.”

Defence company Chemring's shares were hit as it reported a wider loss for the first half and said it expects its full-year 2016 results to “slightly below” market expectations amid higher costs and a delayed contract.

Chemring’s compiled consensus of analysts’ forecasts was for FY16 underlying operating profit of £48.7m.

High-tech components manufacturer Senior led the fallers on the mid-cap index after it issued a pre-close trading update on Tuesday, in which it reiterated that margins in the aerospace division will be lower in the first half of 2016.

The FTSE 250 firm said activity in aerospace is anticipated to increase during the period in line with expectations, but margins will be lower as the ramp-up of new production programmes continues.

Market Movers

FTSE 100 (UKX) 6,249.24 0.73%
FTSE 250 (MCX) 16,986.53 0.16%
techMARK (TASX) 3,046.41 -0.19%

FTSE 100 - Risers

Mediclinic International (MDC) 923.00p 3.42%
Intu Properties (INTU) 308.30p 3.28%
Standard Life (SL.) 331.40p 2.51%
Old Mutual (OML) 188.30p 2.45%
Barclays (BARC) 180.65p 2.15%
Capita (CPI) 1,068.00p 2.10%
RSA Insurance Group (RSA) 475.10p 2.08%
Ashtead Group (AHT) 1,043.00p 1.96%
Tesco (TSCO) 164.55p 1.92%
Whitbread (WTB) 4,117.00p 1.88%

FTSE 100 - Fallers

Informa (INF) 658.50p -2.01%
Anglo American (AAL) 660.20p -1.46%
Taylor Wimpey (TW.) 185.60p -1.28%
GKN (GKN) 284.30p -1.18%
Sky (SKY) 878.00p -1.07%
TUI AG Reg Shs (DI) (TUI) 1,019.00p -0.97%
Barratt Developments (BDEV) 562.00p -0.97%
Shire Plc (SHP) 3,976.00p -0.85%
Centrica (CNA) 213.70p -0.84%
Berkeley Group Holdings (The) (BKG) 3,218.00p -0.83%

FTSE 250 - Risers

Circassia Pharmaceuticals (CIR) 97.00p 6.59%
Softcat (SCT) 360.10p 5.73%
Evraz (EVR) 129.70p 5.45%
Allied Minds (ALM) 355.00p 4.41%
ICAP (IAP) 431.90p 4.20%
Hansteen Holdings (HSTN) 106.50p 3.90%
NMC Health (NMC) 1,187.00p 3.22%
Aberdeen Asset Management (ADN) 292.00p 2.93%
Telecom Plus (TEP) 1,032.00p 2.89%
SEGRO (SGRO) 452.20p 2.89%

FTSE 250 - Fallers

Senior (SNR) 196.70p -12.69%
Cairn Energy (CNE) 190.10p -4.85%
IMI (IMI) 969.50p -3.91%
Centamin (DI) (CEY) 106.50p -3.45%
Entertainment One Limited (ETO) 172.00p -3.43%
Euromoney Institutional Investor (ERM) 972.50p -3.14%
Kaz Minerals (KAZ) 135.40p -3.08%
Wetherspoon (J.D.) (JDW) 721.00p -2.96%
Daejan Holdings (DJAN) 5,485.00p -2.83%
BGEO Group (BGEO) 2,549.00p -2.75%