The FTSE 100 index closed firmer on Tuesday, after a choppy session, as the latest opinion polls showed Remain-Brexit support on a knife edge ahead of Thursday’s referendum.
The blue-chip ticker ended up 0.36% at 6,226. However, things were less chirpy among the small-caps. The FTSE AIM 100 Index closed down 0.12% at 3,413, while the FTSE AIM All-Share Index came off the same percentage, to 721.
Across the London bourse, 31% of stocks gained on the day, 29% lost and 40% were unchanged.
The top gainer was Kimberly Ent (LON:KBE) which rose by 37.5% to 1.65p, while the biggest faller overall was Churchill Mining (LON:CHL) which shed 19.1% to 19.125p after the company said that the ICSID Tribunal had advised it expects to issue its ruling in relation to Indonesia’s Forgery Dismissal Application in September.
Churchill Chairman David Quinlivan said "We are pleased that the Tribunal has confirmed the timing of the issuing of its ruling on Indonesia's Forgery Dismissal Application."
In spite of the bourse gains, oil prices took away some of the gusto as Brent crude lost 1.5% to $49.88.
The UK holds a referendum on June 23 to determine whether Britain stays or quits the European Union.
On Tuesday, the European Central Bank confirmed that it had arranged contingency plans with the Bank of England – the first time the eurozone’s central bank had acted in such a concerted way with currency swaps with the BoE since the credit crisis in 2008-09.
A host of central bankers from Japan to Switzerland have said they stand ready to provide additional liquidity to financial markets should the UK vote to leave the EU on Thursday.
The Financial Times’ poll of polls indicates that while Remain has made inroads in the past week to reclaim the high ground, the overall barometer suggests a narrow lead of 45% for Leave to 44% for Remain in the EU.
Midsession
By mid-afternoon the FTSE 100 was flattening out after starting the day on the back foot, but mining stocks continued to weigh down the index.
EU referendum uncertainty, of course, had a part to play in the much of the trading.
Randgold Resources (LON:RRS), London’s largest precious metals group, was among Tuesday’s biggest fallers as the price of gold dropped 1.25% to US$1,274 per ounce.
Gold as always remains a key ‘safe haven’ asset, bought as a store of value in times of economic uncertainty, though the recent turn in the EU referendum polls to favour of the ‘Remain’ campaign has meant fearful perceptions have ebbed somewhat.
Fawad Razaqzada, analyst at Forex.com, nevertheless, says uncertainty and volatility around Thursday’s vote will continue to be a factor.
TRENDING: Bremain Rovers vs Brexiter City in Euro knock-out
TOP RISERS: Tlou Energy, Independent Resources, Futura Medical
BIGGEST LOSERS: London Capital Group, Churchill Mining, Chemring
“The Brexit vote has not come to pass just yet and so despite what the opinion surveys may suggest, gold, as a safe haven asset, will likely lurk in the background until at least Friday,” Razaqzada said in a note.
He added: “The biggest move of the week, however, is likely to occur on Friday when the outcome of the vote is known.
“Gold could fall sharply on reduced safe haven demand if Remain is victorious. On the other hand, if the unthinkable happens then the metal could sky rocket.”
Morning Market Report - 10am
London’s FTSE 100 has slowly picked up much of the morning’s early lost ground as investors continue to digest the latest wave of referendum commentary.
The polls are still tight and much could still happen before Thursday’s EU vote, and in the meantime equities and foreign exchange markets are expected to show some volatility.
Down 10 points, 0.17%, London’s blue-chip benchmark stood at 6,193.
The FTSE 100 loser column, meanwhile, was dragged down by the mining heavyweights.
Anglo American Plc (LON:AAL), off 1.8% to 658.2p, was down the most of the mining majors taking up seven of the top 10 fallers from the FTSE 100.
Antofagasta Plc (LON:ANTO) and Randgold Resources Ltd (LON:RRS) were both 1.7% lower. Meanwhile Fresnillo Plc (LON:FRES), Rio Tinto Plc (LON:RIO), BHP Billiton Plc (LON:BLT) lost nearly 1.5%, and Glencore Plc (LON:GLEN) gave up about 1%.
Mike van Dulken says miners are missing out on ordinarily positive currency benefits as well as a supposed perception of reduced ‘event-risk’ on economic growth, which as he points out makes it a ‘bad day at the coal face’.
“Some of today’s weakness may be attributed to simple digestion of two days of strong gains and that sharp turnaround in market sentiment,” van Dulken said in a note.
“The balance could relate to Brexit polls still delivering mixed messages, ensuring the referendum result remains too close to call.”
He also noted that Federal Reserve chair Janet Yellen is scheduled to testify to the US Senate banking committee later today, and that could be another factor keeping mining stocks lower.
BIGGEST LOSERS: Chemring Group, Senior Plc
TOP RISERS: Nostra Terra, Futura Medical
Costa coffee owner Whitbread plc (LON:WTB) was the FTSE 100’s top stock, rising 3.2% to 4,170p, after a trading update showed the chain had recovered from the impacts of a warmer winter.
Whitbread reported 8% sales growth, but also noted a ‘soft’ hotel market had hindered progress for the group’s other flagship brand Premier Inn.
Banking and financial services stocks also strengthened. Barclays Plc (LON:BARC) rose 2% to 180.45p, followed by Royal Bank of Scotland Plc (LON:RBS) and RSA Insurance Group Plc (LON:RSA), up 1.3% each.
Opening Snapshot at 8:15am
The FTSE 100 started this morning on the back foot as expected, down 0.6% or 34 points on yesterday's close to 6,169.
The top winner was British Land Company plc (LON:BLND) up 6.5p or just under 1% to 748p.
The biggest loser was Anglo American plc (LON:AAL) dropping over 3% or 22.7p to 647p.
Preview at 6.52am
London’s blue chip stocks are expected to give back some of yesterday’s gains when trading begins.
Monday brought a 182 point rally for the FTSE 100, to 6,204, amid easing ‘brexit’ fears as polls showed the Remain campaign was in the lead ahead of Thursday’s EU referendum.
Among the latest polls the ORB, providing its final poll for The Telegraph newspaper, indicated a seven percentage point lead for Remain among definite voters – with Remain taking 53% of the vote, versus Leave’s 46%.
In this particular poll Leave held a one percentage point lead a week ago.
It is, however, clear that the polls are tight and much can still happen before Thursday’s vote.
“Financial markets appear to be taking the view that the race may well already be run, which given the twists and turns seen already in this campaign may well be extremely far sighted, or dangerously premature,” said Michael Hewson, analyst at CMC Markets.
“With more polls due out later today we can expect to see further volatility unfold in the event of a move either way.”
In the United States, Monday’s stock market trading saw the Dow Jones gain 129 points, 0.73%, to close at 17,804. The S&P 500 was up 0.58% to 2,083 and the Nasdaq added 0.77% to 4,837.
Asian markets also moved higher. Japan’s Nikkei gained 1.3% to 16,177, Hong Kong’s Hang Seng rose 0.6% to 20,630, and the Shanghai Composite was only just in positive territory at 2,890.
Australia’s ASX 200 gained 0.4% at 5,278.
Oil prices are positive. Brent crude is priced at around US$50.35 after a 2.3% rally, while WTI crude climbed 2.7% to US$49.30.
Gold was down 0.4% trading at around US$1,285.
In London, CFD and spreadbetting group IG Markets sees the FTSE 100 opening lower. About an hour before Tuesday’s open IG calls the index at 6,189 to 6,194.