MILAN: European shares rose for the fifth day running on Thursday, assisted by firmer banks and miners and expectations that Britain would vote to stay in the European Union.
The pan-European STOXX 600 and FTSEurofirst 300 indexes rose 1.5 and 1.3 percent respectively, both ending at their highest point in about two weeks.
The gains follow a sell-off in the previous week when concerns over a possible Brexit mounted, depressing them to their lowest level since February and pushing investors towards safe haven assets like gold and the German bund.
“For weeks, market participants have been speculating about what might the outcome of the Brexit vote will be. While the results are not due in until the early hours of Friday, it looks like the bookies and the markets have made up their minds,” Gai Capital analyst Fawad Razaqzada said.
Voting in Britain’s referendum on EU membership will end at 2100 GMT, with the final result expected by 0600 GMT Friday.
A series of last-minute opinion polls carried out before the vote started and bookmaker odds have all pointed to a rise in support for the “Remain” camp, propping up risky assets like equities and sending the sterling to a 2016 high. Razaqzada said a victory of the “Remain” camp could still help stocks and the pound extend the gains although some of that potential had already been priced in.
Banks rose 2.7 percent, making the best five-day winning streak since 2011, helped by prospects of a defeat of the “Leave” camp in the UK vote. Spanish lender Santander, which has a meaningful UK exposure, rose 4.3 percent, while Italian banks outperformed as expectations the UK will remain in the EU pushed Italian government bond yields down sharply.
Italian banks are particularly exposed to sovereign debt.
Mining stocks such as Glencore also advanced as London copper prices neared two-week highs.
Copyright Reuters, 2016
Courtesy : BRecorder