London close: Stocks drop as polls show support for Brexit

UK equities declined on Tuesday as investors sifted through economic data and reacted to polls showing support for Brexit.

Two Guardian/ICM polls have suggested there are more Britons wanting to leave the European Union than those wanting to remain in the bloc ahead of the 23 June referendum.

An online poll showed 52% in support of Brexit compared to 48% in the Remain camp. A telephone poll revealed 45% in the Leave camp compared to 42% in the Remain and 13% who remain undecided.

“However, it is worth noting that ICM surveys typically do favour a Brexit, with phone polls often coming out more heavily on the ‘leave’ side too,” said IG analyst Josh Mahony.

The pound fell 0.59% against the dollar following the news.

Property investment company British Land and housebuilder Berkeley Group’s shares fell on fears a possible Brexit will hurt the sector.

Meanwhile, official data showed the eurozone remained in deflation in May. Eurostat said the euro-area’s consumer price index fell an annualised 0.1% in May, as expected by analysts, compared to a 0.2% drop in April.

The data comes ahead of the European Central Bank's policy announcement on Thursday. The ECB, which is targeting inflation of just below 2%, is expected to keep policy unchanged. In March the ECB introduced a raft of stimulus measures to mend price stability including the expansion of the asset purchase programme and a cut to interest rates.

“Draghi has tried everything in his powers to stimulate the stubborn eurozone, and although inflation has ticked up slightly, he has yet to make any real inroads," said Dennis de Jong, managing director at UFX.com.

“With global uncertainty swirling, and a British vote on EU membership looming large, many observers appear to be sitting on their hands until the picture is clearer.”

Across the Atlantic, the Commerce Department revealed US consumer spending rose 1.0% in April from a month earlier, the biggest monthly increase since August 2009. Analysts had pencilled in a 0.7% gain.

Personal income increased 0.4% in April, in line with expectations.

Separately, a report showed US consumer confidence unexpectedly deteriorated in May. The Conference Board Consumer Confidence Index fell to 92.6 from 94.7 in April, missing expectations for an increase to 96.0.

The Chicago manufacturing purchasing managers’ index unexpectedly slipped into contraction in May to reading of 49.3, down from 50.4 the previous month. Analysts had forecast 50.5. A level below 50 signals contraction while a reading above that suggests an expansion.

US home price appreciation remained strong in March. The S&P/Case-Shiller 20-City Composite Home Price Index rose by 5.4% in March from the same month last year, in line with expectations and the previous month’s gains.

In commodities, oil prices wavered as the production of Canadian oil resumed and investors looked ahead to this Thursday’s meeting of the Organization of the Petroleum Exporting Countries.

Brent crude rose 0.34% to $49.95 per barrel and West Texas Intermediate climbed 0.52% to $49.87 per barrel at 1639 BST.

Among corporate stocks, Inmarsat was under the cosh as FTSE Russell reported that the satellite communications company could be pushed out of the FTSE 100 by Hikma Pharmaceuticals. Hikma’s shares rallied on the news.

Royal Mail shares were up on suggestions there could be some consolidation within the sector.

3i shares jumped as the private equity firm said it had agreed to invest €181m in Schlemmer, a global leader in cable management solutions for the automotive industry for an undisclosed sum

Alliance Trust advanced as said it has received an unsolicited, informal approach from fellow FTSE 250 investment trust RIT Capital Partners that proposed a merger of the two companies.

Market Movers

FTSE 100 (UKX) 6,232.44 -0.61%
FTSE 250 (MCX) 17,182.23 -0.29%
techMARK (TASX) 3,117.89 -0.13%

FTSE 100 - Risers

Worldpay Group (WI) (WPG) 277.10p 1.80%
3i Group (III) 561.50p 1.72%
Informa (INF) 680.00p 1.72%
RSA Insurance Group (RSA) 489.60p 1.56%
Sage Group (SGE) 612.50p 1.32%
Royal Mail (RMG) 539.00p 1.22%
Pearson (PSON) 838.50p 1.21%
Experian (EXPN) 1,306.00p 1.16%
Randgold Resources Ltd. (RRS) 5,800.00p 1.13%
Admiral Group (ADM) 1,968.00p 1.08%

FTSE 100 - Fallers

Inmarsat (ISAT) 721.00p -3.67%
British Land Company (BLND) 740.00p -2.63%
ITV (ITV) 214.80p -2.59%
Standard Chartered (STAN) 529.60p -2.43%
Glencore (GLEN) 131.10p -2.38%
Kingfisher (KGF) 366.20p -2.24%
Burberry Group (BRBY) 1,073.00p -2.19%
Royal Bank of Scotland Group (RBS) 246.00p -2.07%
Barclays (BARC) 182.40p -2.04%
BT Group (BT.A) 442.80p -2.01%

FTSE 250 - Risers

IP Group (IPO) 168.80p 3.49%
Hikma Pharmaceuticals (HIK) 2,298.00p 3.28%
Softcat (SCT) 357.40p 3.15%
Ibstock (IBST) 208.80p 2.76%
Alliance Trust (ATST) 521.00p 2.46%
Ophir Energy (OPHR) 71.65p 2.36%
Restaurant Group (RTN) 367.80p 2.11%
Brewin Dolphin Holdings (BRW) 258.00p 1.98%
Micro Focus International (MCRO) 1,631.00p 1.94%
Halma (HLMA) 950.50p 1.82%

FTSE 250 - Fallers

Evraz (EVR) 110.90p -4.81%
Investec (INVP) 468.80p -3.82%
Aldermore Group (ALD) 212.30p -3.50%
Man Group (EMG) 131.90p -3.37%
Kaz Minerals (KAZ) 145.60p -3.32%
Virgin Money Holdings (UK) (VM.) 365.80p -3.23%
Sophos Group (SOPH) 211.10p -3.17%
DFS Furniture (DFS) 292.60p -3.11%
Hastings Group Holdings (HSTG) 181.90p -3.09%
Clarkson (CKN) 2,250.00p -3.02%