Global Stocks up with Reduced Brexit Chances

Global stocks rose up on June 20 post polls showed that Britain has more than an even chance of staying in the EU. The sterling also strengthened at the news. The British currency was at the receiving end of worries about Britain voting to leave the EU. The reduced Brexit fears led to pound to go up by 1.5 percent compared to the dollar and also in excess of two percent against the Yen.

Markets rise

The FTSEurofirst 300 index- which is pan-European- added 2.9 percent. This rise is led by the banks. SX7P. The FTSE 100 index of Britain. FTSE notched up similar gains. MSCI’s widest index of the Asia-Pacific shares outside of Japan rose approximately 1.6 percent. Nikkei of Japan rose 2.4 percent as the Yen floundered. It is estimated that Wall Street will open high as the index futures of U.S e-mini stocks went up by about one percent.

Weekend polls showed that “Remain: regaining its lead. The overall picture, however, showed an evenly split electorate. Odds given out by bookmakers showed that those who wanted to remain in European Union to be 72 percent on June 20, an increase from the highest of 67 percent on June 17. Campaigning restarted on June 19, after three days of suspended activities due to Jo Cox, a British parliamentarian being killed in a street in her own constituency on June 16.

Currency up

According to Peter Schaffrik, chief European strategist of the RBC, there is a possibility that the polls were influenced by recent events. It pointed out, however, that a well documented and expected pull towards the status quo is largely responsible for such swings.

The Sterling went up 1.64 percent to touch $1.4591 GBP. The currency has previously hit two week loss of $1.4013 on June 16. It went up 2.2 percent to touch 152.63 Yen. There was also the 1.1 percent rise against euro to 77.72 pence.  According to Ulrich Leuchtmann of Commerzbank, the result of this referendum, although remaining open, is increasingly showing that leaving the EU is not a likely scenario. The scene will be further cleaned up at the next polls. If such a sentiment remains, the pressure on the euro or sterling will relax further.

Oil prices, which also suffered due to indecisive Brexit, continued the gains made on June 17. The Brent Crude traded in the near vicinity of $50 per barrel at about $49.98- an increase of 81 cents on day. 

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