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Global Stocks, Pound Rally as UK Votes Whether to Leave EU

Benchmark U.S. crude added 72 cents to $49.85 a barrel
By The News · 23 of June 2016 07:40:15
A currency trader talks near screens showing the foreign exchange rates between the Pound, Korean Won, and the Euro and Won at the foreign exchange dealing room in Seoul, South Korea, No available, photo: AP/Lee Jin-man

European stocks and the British pound rallied Thursday as investors appeared to bet that Britain will vote to remain in the European Union, avoiding the economic uncertainty that experts say a departure would cause.

KEEPING SCORE: Britain’s FTSE 100 was up 1.2 percent to 6,338 while France’s CAC 40 rose 1.9 percent to 4,462 and Germany’s DAX gained 2 percent to 10,267. U.S. shares were set to rise on the open, with Dow and S&P 500 futures both up 0.9 percent.

BRITAIN VOTE: Investors are awaiting the outcome of the referendum on Britain’s membership in the EU. An exit would likely send global shares and European currencies tumbling, analysts say, due to the economic uncertainty it would create in the region. By midday in Europe, bookies had shortened their odds sharply on the “remain” camp winning, with betting company Betfair giving it an 84 percent chance of victory. Trading was thin and likely to remain volatile, however.

CURRENCIES: The pound was up 1.2 percent to $1.4882, its highest level this year and up from $1.4705 the day before. The dollar rose to 105.67 yen from 104.45 yen and the euro strengthened to $1.1387 from $1.1271.

THE QUOTE: “Today will be rife with speculation and the moves seen in the pound this morning are already a testament to this,” said William Shepherd, head of treasury at UKForex, a currency transfer provider. “But as the saying goes, it’s not over until the fat lady sings, and a day can be a very long time in the currency markets.”

ASIA’S DAY: Japan’s benchmark Nikkei 225 gained 1.1 percent to 16,238.35. Hong Kong’s Hang Seng inched up 0.4 percent to 20,868.34, while the Shanghai Composite declined 0.5 percent to 2,891.96. South Korea’s Kospi fell 0.3 percent to 1,986.71. Australia’s S&P/ASX 200 rose 0.2 percent to 5,280.70.

ENERGY: Benchmark U.S. crude added 72 cents to $49.85 a barrel. It fell 72 cents on Wednesday. Brent crude, the benchmark for international oil prices, rose 82 cents to $51.42 a barrel in London.