Brexit concerns raises financial anxiety

With Dublin closed for a public holiday, it was left to the other European markets to react to the recent opinion polls showing a lead for Brexit campaigners. The news heightened financial market anxiety, increasing expectations of sharp swings in the pound in the run-up to the referendum on June 23rd.

While the pound weakened, share prices rose on UK markets with the FTSE 100 gaining the most among major western European markets.

Overall European stocks rebounded from their first weekly drop in a month as energy and commodity producers advanced, with UK shares leading the charge.

LONDON

Britain’s top share index climbed

, with a rally in metals prices boosting the UK mining index to a one-month high, although housebuilders fell on concerns surrounding the June 23rd EU referendum.

The commodity-heavy FTSE 100 index was up 1 per cent, outperforming the broader European market. The UK mining index rose 6.5 per cent to its highest level since early May as prices of major industrial metals advanced after a fall in the US currency, making dollar-priced commodities cheaper for holders of other currencies.

Miners Anglo American, Rio Tinto, BHP Billiton, Antofagasta and Glencore all rallied by between 5 per cent and 11.1 per cent. BP added 2.8 per cent, pushing oil stocks higher, as crude rose after Abu Dhabi forecast prices could climb as high as $60 a barrel.

Among the top fallers, British housebuilding stocks Persimmon, Barratt Developments and Taylor Wimpey all fell by 1.1 per cent to 1.6 per cent amid Brexit concerns. Related concerns saw the domestically focused FTSE 250 underperform, up just 0.7 per cent.

Pharmaceuticals company Indivior fell more than 10 per cent with a trader citing a Bank of America Merrill Lynch downgrade on the stock, to neutral from buy. Indivior had risen over 36 per cent on Friday after winning a patent ruling on its main product, heroin substitute Suboxone Film.

Airlines were experiencing a bumpy ride after low-cost carrier EasyJet saw its load factor – the measure of how full its flights are – fall back in May.

The firm said its load factor dipped slightly, by 0.1 per cent to 91.5 per cent last month compared with 12 months ago, as it felt the force of 173 cancellations driven by the French air traffic control strikes and the EgyptAir crash on May 19th.

However, the Luton-based airline said it carried 6.9 million passengers in May, up 5.7 per cent on a year ago. Shares were down 19p to 1505p. British Airways owner IAG was the biggest faller on the market, down more than 1 per cent, or 7.5p, to 522.5p.

EUROPE

Brexit concern also

affected Spanish and Italian bonds while boosting the Swiss franc. Markets are being pulled in different directions, with worries over a slowing US economy and British polls weighing on some assets, and a weaker dollar and chances the Fed will keep interest rates lower for longer supporting others.

European markets were flat, with Germany’s Dax 0.2 per cent higher and France’s Cac 40 making marginal gains of 0.04 per cent. The pan-European STOXX 600 and FTSEurofirst 300 equity indexes rose 0.3 and 0.4 per cent respectively, having fallen about 1 per cent on Friday.

European share gains stalled last week amid resurgent worries about global growth and as disappointing US jobs data cast doubt on the strength of the world's biggest economy and on whether the Federal Reserve will raise rates at its next meeting on June 15th.

Among stocks moving on corporate news, CNH Industrial gained 5.2 per cent after it was added to Goldman Sachs Group's conviction list.

European coal prices surged to the highest in 10 months, buoyed by rising fuel prices and supply disruptions.

The MSCI Emerging Markets Index rose 1 per cent to a one-month high, advancing for a third day and climbing above its 50-day moving average.

Benchmark gauges in Russia and the Philippines gained more than 1 per cent.