London close: Stocks rise on referendum optimism but analysts cautious

Britain's main equity indices gained ground on Thursday as voting for the EU referendum began in the UK amid torrential rain and as bookmakers' odds and opinion polls suggested Brexit would be avoided - although some analysts were less sure.

Let by rising commodities and financials stocks the FTSE 100 finished 76.91 points or 1.23% higher at 6,338.10 while the FTSE 250 climbed 289.97 points or 1.70% to end the day at 17,333.51.

Sterling was also shooting higher, rising to 1.4797 against the dollar, for a gain of 0.62% on the day, and down 0.05% versus the euro at 1.3015.

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.

"It’s a measure of market nervousness that trading volumes are thin on just about everything today. This morning’s moves really felt like a low-volume melt-up. Having said that, there are a few day traders buzzing in and out and a number took advantage of cable’s early bounce to go short.

"But people are wary of holding anything overnight. But while the market has followed the punters and is betting on a vote to 'Stay', there are concerns that the risk of a 'Leave' vote has been understated. The polls are just too close to call for this level of complacency. The “undecideds” and dismal weather could make all the difference," David Morrison, chief market analyst at SpreadCo told clients.

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

Stateside, Thursday's batch of data was rather mixed.

According to figures from the Commerce Department, new homes sales fell 6% from the revised April rate of 586,000 to a seasonally-adjusted annual rate of 551,000. Economists had been expecting a drop to 560,000. April’s pace was revised down from 619,000.

On the flip-side, US initial jobless claims declined by 18,000 from the previous week’s unrevised level to 259,000, beating expectations of a smaller drop to 270,000.

Oil prices continued to rise, with Brent crude 1.13% firmer at $50.42 a barrel and West Texas Intermediate up 0.968% at $49.61.

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 higher 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 FTSE 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) 6,338.10 1.23%
FTSE 250 (MCX) 17,333.51 1.70%
techMARK (TASX) 3,096.63 0.98%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 528.00p 3.63%
Anglo American (AAL) 694.70p 3.61%
Antofagasta (ANTO) 438.20p 3.11%
Royal Dutch Shell 'B' (RDSB) 1,889.00p 3.08%
London Stock Exchange Group (LSE) 2,735.00p 3.05%
CRH (CRH) 2,094.00p 2.90%
Prudential (PRU) 1,358.50p 2.76%
Glencore (GLEN) 152.95p 2.75%
Barclays (BARC) 186.95p 2.72%
InterContinental Hotels Group (IHG) 2,723.00p 2.68%

FTSE 100 - Fallers

Paddy Power Betfair (PPB) 8,700.00p -4.55%
United Utilities Group (UU.) 932.50p -2.56%
Burberry Group (BRBY) 1,108.00p -2.21%
Diageo (DGE) 1,833.00p -0.52%
National Grid (NG.) 981.00p -0.28%
ARM Holdings (ARM) 1,019.00p -0.20%
Compass Group (CPG) 1,299.00p -0.15%
Severn Trent (SVT) 2,238.00p -0.09%
RSA Insurance Group (RSA) 483.70p -0.08%
Smith & Nephew (SN.) 1,161.00p 0.00%

FTSE 250 - Risers

Smith (DS) (SMDS) 410.10p 6.00%
Clarkson (CKN) 2,308.00p 5.53%
Tullow Oil (TLW) 267.90p 5.39%
Thomas Cook Group (TCG) 73.35p 5.01%
St. Modwen Properties (SMP) 334.70p 4.92%
Galliford Try (GFRD) 1,321.00p 4.84%
Evraz (EVR) 134.00p 4.69%
Savills (SVS) 775.00p 4.66%
Euromoney Institutional Investor (ERM) 1,063.00p 4.63%
Virgin Money Holdings (UK) (VM.) 366.40p 4.24%

FTSE 250 - Fallers

AO World (AO.) 154.80p -3.25%
Debenhams (DEB) 67.80p -2.73%
Metro Bank (MTRO) 2,100.00p -2.33%
Sophos Group (SOPH) 179.10p -1.86%
UBM (UBM) 581.50p -1.69%
Circassia Pharmaceuticals (CIR) 104.20p -1.23%
Ascential (ASCL) 259.80p -1.07%
Elementis (ELM) 206.60p -1.01%
OneSavings Bank (OSB) 333.90p -0.92%
CLS Holdings (CLI) 1,585.00p -0.69%