London midday: Flying FTSE and pound suggest confidence in Remain win

Stocks were hitting their highest levels in around seven weeks by midday on Thursday as voting for the EU referendum began in the UK amid torrential rain as bookmakers odds and opinion polls suggested Brexit would be avoided.

The FTSE 100 was up almost 95 point or 1.51% to 6,356.06 and the FTSE 250 by more than 330 points or 1.95% to 17,375.55.

Sterling was also shooting higher, extending six-month highs against the dollar to 1.4876, a rise of 1.15% on the day, and up 0.31% versus the euro at 1.3059.

This was sparked by the odds of a Remain vote in the EU referendum rising to 86% from 77% overnight, according to Betfair. The implied probability of Brexit shifted from 22.7% to 17.2% in the space of a few minutes earlier on Thursday, the bookmaker said.

An Ipsos Mori phone poll for the Evening Standard newspaper released around the same time found 52% support for Remain, up five percentage points, versus 48% for Leave as the pro-Brexit camp lost five points.

“Strength in UK equities and sterling - both holding up around recent recovery highs - suggests confidence that a Remain vote will prevail," said analyst Mike van Dulken at Accendo Markets.

"However, opinion polls remain extremely tight - more to come today - meaning it's 'squeaky-bum time' for all those involved in financial markets right through til the early hours of tomorrow morning."

Analyst Jasper Lawler at CMC Markets said: "Investors who wanted to protect their portfolio against adverse moves in sterling or other UK assets will have done so already. With a slight bias to a Remain vote, there is no need for any additional hedging trades and the lighter volume suggests day traders are sitting on their hands until the result is out."

In terms of data, the preliminary Eurozone composite PMI was down, as Manufacturing PMI was up and Services PMI down.

In the afternoon, there is data in the form of the Chicago Fed National Activity Index and Kansas City Fed manufacturing, both forecast flat for the latest month’s data although US PMI Manufacturing may be on for a small gain in June. US New Home Sales are seen lower in May while the US Leading Index may barely have grown in May.

Oil prices continued to rise, with Brent crude 1.7% firmer at $50.75 a barrel and West Texas Intermediate up 1.5% at $49.87.

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.

AstraZeneca was slightly lower after it confirmed disappointing news to investors on Thursday, with updated guidance from US regulators its FluMist Quadrivalent influenza vaccine is not used this coming season.

This was based on CDC vaccine effectiveness data from the last three flu seasons in the US, which indicated FluMist did not demonstrate statistically significant effectiveness in children aged between two and 17.

In the FSTE 250, packaging company DS Smith was a riser after it reported a small jump in full-year profit as revenue grew, partly thanks to acquisitions.

Market Movers

FTSE 100 (UKX) 6,356.12 1.52%
FTSE 250 (MCX) 17,378.32 1.96%
techMARK (TASX) 3,119.40 1.72%

FTSE 100 - Risers

InterContinental Hotels Group (IHG) 2,760.00p 4.07%
Whitbread (WTB) 4,209.00p 3.42%
Royal Bank of Scotland Group (RBS) 254.90p 3.37%
International Consolidated Airlines Group SA (CDI) (IAG) 526.50p 3.34%
DCC (DCC) 6,655.00p 3.02%
Prudential (PRU) 1,361.50p 2.99%
Glencore (GLEN) 153.15p 2.89%
Antofagasta (ANTO) 437.20p 2.87%
Anglo American (AAL) 689.70p 2.86%
CRH (CRH) 2,092.00p 2.80%

FTSE 100 - Fallers

United Utilities Group (UU.) 935.50p -2.25%
Rexam (REX) 625.00p 0.00%
Randgold Resources Ltd. (RRS) 6,420.00p 0.31%
SABMiller (SAB) 4,281.50p 0.34%
Severn Trent (SVT) 2,248.00p 0.36%
National Grid (NG.) 987.50p 0.38%
Experian (EXPN) 1,327.00p 0.38%
RSA Insurance Group (RSA) 486.20p 0.43%
Compass Group (CPG) 1,307.00p 0.46%
BAE Systems (BA.) 505.00p 0.50%

FTSE 250 - Risers

Smith (DS) (SMDS) 413.20p 6.80%
Ocado Group (OCDO) 263.90p 5.94%
Hays (HAS) 138.40p 5.25%
Entertainment One Limited (ETO) 180.60p 4.94%
Vesuvius (VSVS) 356.30p 4.79%
Kennedy Wilson Europe Real Estate (KWE) 1,137.00p 4.79%
Balfour Beatty (BBY) 259.80p 4.76%
Intermediate Capital Group (ICP) 625.50p 4.60%
Aveva Group (AVV) 1,766.00p 4.56%
Renishaw (RSW) 2,239.00p 4.53%

FTSE 250 - Fallers

Fidelity China Special Situations (FCSS) 136.50p -0.94%
TR Property Inv Trust (TRY) 304.90p -0.85%
NMC Health (NMC) 1,186.00p -0.84%
Shawbrook Group (SHAW) 292.40p -0.75%
esure Group (ESUR) 269.80p -0.59%
Ascential (ASCL) 261.20p -0.53%
JPMorgan Emerging Markets Inv Trust (JMG) 587.50p -0.42%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 506.50p -0.39%
Essentra (ESNT) 524.50p -0.38%
Zoopla Property Group (WI) (ZPLA) 312.70p -0.22%