Insurers and financials pace gains ahead of referendum

Insurers and financials paced gains the day before the referendum, with a fair bit of market commentary highlighting the possible disconnect between financial markets, which appeared increasingly confident the UK would 'Remain' in the European Union, and polls of voters' intentions which still appeared to be 'too close to call', according to analysts.

Indeed, the last TNS poll before the 23 June vote, published after the close of trading in London on Wednesday, put backing for the 'Leave' camp at 43.0%, compared to 41.0% for 'Remain'.

Furthermore, using a turnout model from the last general election the pollster concluded that 'Leave' could expect to garner 49.0% of the vote, against just 42.0% for 'Remain', Bloomberg reported.

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.

Acting as a backdrop, steel prices gained ground in overnight trading, among signs of steady steel output globally and stockpiles in Chinese markets, sending shares of miners higher.

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

However, while that marked the 17th consecutive month of contraction it also pointed to a “decent recovery” from January’s 6.7% drop in production, the Australian broker explained.

The most active rebar futures, for October delivery, on Shanghai’s Futures Exchange rose by 2.8% to 2,143 yuan ($325.27) a tonne by the close of trading on Wednesday – its highest since 14 June – according to Reuters.

Three-month copper futures on the LME finished the day up by 1.7% at $4,716.00 per metric tonne.

To take note of perhaps for commodity prices, in its latest so-called Article IV consultation with the US the International Monetary Fund posited that the Greenback might be overvalued by between 10.0% to 20.0%.

Top performing sectors so far today
Insurance (non-life) 2,571.09 +1.71%
Life Insurance 6,964.57 +1.69%
Financial Services 8,923.69 +1.46%
Mining 9,503.33 +1.12%
Aerospace and Defence 4,122.34 +1.06%

Bottom performing sectors so far today
Food Producers & Processors 7,883.34 -2.24%
Industrial Metals & Mining 1,260.64 -0.85%
Chemicals 10,875.34 -0.47%
Electricity 9,022.23 -0.45%
General Industrials 4,631.53 -0.30%