World stocks leap as fears ease over British vote on EU

AP News
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Posted: Jun 20, 2016 7:08 AM
World stocks leap as fears ease over British vote on EU

HONG KONG (AP) — World stock markets jumped and the pound rallied Monday as polls suggested British voters will choose to remain in the European Union in a referendum this week, easing investor worries about a possible "Brexit."

KEEPING SCORE: European stocks led the charge, with Britain's FTSE 100 leaping 2.9 percent to 6,194 and France's CAC 40 up 3.3 percent to 4,330. Germany's DAX rocketed 3.4 percent higher to 9,954. U.S. stocks were poised to open sharply higher, with Dow and S&P 500 futures up 1.2 percent and 1.3 percent, respectively.

BREXIT: Global investors are focusing this week on Britain's referendum on Thursday on EU membership, with results expected a day later. Market anxiety over the uncertain consequences of a British exit, including the impact on global financial markets, had been rising as support for the "Leave" side strengthened. However, three polls over the weekend showed that the "Remain" side had recovered some lost ground, giving investors more confidence to move into riskier assets.

CURRENCIES: The pound jumped on the poll results, rising 1.9 percent to $1.4628 from $1.4400 late last week. The dollar rose to 104.53 yen from 104.13 yen and the euro strengthened to $1.1327 from $1.1276.

ANALYST INSIGHT: "The entire market is now focused on the U.K.'s EU referendum result," said Margaret Yang, an analyst at CMC Markets in Singapore. "Judging by the market reaction over the last two days, more volatility is likely this week. It is expected that a vote to remain would lead to a quick unwinding of risk premium and a substantial risk-on rally, whereas a Brexit vote would have the opposite effect."

ASIA'S DAY: Japan's benchmark Nikkei 225 index surged 2.3 percent to close at 15,965.30 and South Korea's Kospi climbed 1.4 percent to 1,981.12. Hong Kong's Hang Seng added 1.7 percent to 20,510.20 while the Shanghai Composite Index crept up 0.1 percent to 2,888.81. Australia's S&P/ASX 200 rose 1 .8 percent to 5,256.90. Benchmarks in Taiwan, New Zealand and Southeast Asia also gained.

ENERGY: Benchmark U.S. crude oil futures rose 83 cents, or 1.7 percent, to $48.81 a barrel in electronic trading on the New York Mercantile Exchange. The contract had climbed $1.77 on Friday. Brent crude, used to price international oils, gained 84 cents to $50.59 barrel in London.