Europe open: Stocks rise as UK voters head to the polls

European stocks rose in early trade as voters in the UK headed to the polls for the European Union referendum.

At 0840 BST, the benchmark Stoxx Europe 600 index was up 0.6%, Germany’s DAX was up 1% and France’s CAC 40 was 0.8% higher.

At the same time, oil prices edged higher. West Texas Intermediate was up 0.5% at $49.36 a barrel and Brent crude was 0.6% stronger at $50.17.

Financial markets were pretty calm, with investors seemingly hopeful of a Remain vote. The latest polls from ComRes for the Daily Mail and ITV and the polls conducted by YouGov for the Times both showed an increase in support for the Remain campaign.

Lee Wild, heady of equity strategy at Interactive Investor, said: “The start of voting might mean a quieter day for stocks, but traders are already buying again and will be quick to price in any early sniff of a result.

“The implications of the EU referendum for financial markets cannot be underestimated. Vote Remain and UK shares will add to this week's gains. Back Leave and there'll be carnage on Friday morning. Opinion polls tell us it's too close to call, but the hot money is most definitely on the status quo and another rally to end the week.”

Still, Wild pointed out that even in the event of a Remain vote, it's only a matter of time before investors remember lacklustre global economic growth, the slowdown in China, and the threat of Donald Trump making it to the White House.

Voting began at 0700 BST and will close at 2200 BST, with the results expected early on Friday.

In currency markets, the pound was trading down 0.2% against the dollar at $1.4772, slipping back after hitting a six-month high of $1.4846 in Asian trading.

Hussein Sayed, chief market strategist at FXTM, said: “Not only did the sterling rally this week, but broad based risk appetite also boosted high yielding currencies, equities, and AAA sovereign bond yields, as if investors are saying we are almost convinced the UK will not divorce the European Union. Risk premium is barely priced into financial markets suggesting that the upside is limited from current levels, but if markets have got it wrong here’s the interesting part.

A Brexit vote is likely to be disastrous. Many analysts were trying to predict the magnitude of Sterling’s fall in case of a Brexit, whether it’s 10%, 20% or more than 30%, all agree it’s going to be severe. In the equity markets, the banking sector will be hit the hardest, and will likely to see a double digit drop in UK’s major banks.

Corporate news was thin on the ground, but Tesco rallied in London after the supermarket operator's first-quarter results confirmed sales growth continued for the second successive period.