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FTSE snaps three-month winning streak as Brexit poll weighs

Politics May 31, 2016 17:14
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© Reuters. A worker shelters from the rain as he passes the London Stock Exchange in the City of London

By Kit Rees and Atul Prakash

LONDON (Reuters) - Britain's top share index broke a three-month streak of gains after the results of a telephone poll showed British voters were favouring a vote to leave the European Union in a June 23 referendum.

The FTSE 100 index was down 0.6 percent at 6,230.79 points at the close, easing from a one-month high of 6,290.07 points touched earlier in the session.

The phone poll by polling firm ICM published on Tuesday showed 45 percent of respondents favoured leaving the EU compared with 42 percent who said they would vote to stay in the bloc.

"Widespread selling for sterling and an immediate flight to safety signifies the fact that markets have been caught napping with an overconfidence that every poll would come out in favour of the 'remain' campaign," Joshua Mahony, market analyst at IG, said in a note.

While losses were broad-based, with British Land Company (L:BLND), ITV (L:ITV) and Standard Chartered (L:STAN) among the top fallers, shares in satellite company Inmarsat (L:ISA) dropped 3.9 percent, with analysts citing the possibility of the firm being relegated in Wednesday's FTSE 100 index reshuffle.

Inmarsat has fallen more than 36 percent so far in 2016.

"Inmarsat's problems are partly related to the sector and partly related to the oil price. Their clients are very largely maritime, and maritime clients in turn are quite often linked to the energy sector – it's just getting off its knees," said Ken Odeluga, market analyst at City Index.

The UK mining index (FTNMX1770) also fell, down 1.5 percent as copper prices declined on a resurgent dollar following increasing expectations of a U.S. interest rate hike.

Copper prices remained on track for a more than 7 percent decline in May, the biggest monthly drop since November.

St. Louis Federal Reserve President James Bullard on Monday echoed remarks by U.S. central bank chief Janet Yellen that global markets appear to be "well-prepared" for a summer interest rate hike by the Fed, although he did not specify a date for the move. A stronger dollar makes commodities more expensive for holders of other currencies.

Shares in Glencore (L:GLEN), BHP Billiton (L:BLT), Anglo American (L:AAL) and Antofagasta (L:ANTO) fell 1.7 to 2.4 percent.

Among mid-caps, Alliance Trust (L:ATST) rose 2.5 percent after RIT Capital Partners (L:RCP) made an informal merger proposal for the investment firm. RIT confirmed talks saying a merger possibility was at "a very preliminary stage of consideration".

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through  the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.


If you have any thoughts, suggestions or feedback on this, please email 

                 Mike Dolan, Markets Editor EMEA.

FTSE snaps three-month winning streak as Brexit poll weighs

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