FTSE yo-yos as UK goes to the polls - Updated

Added 23rd June 2016

Markets were not as sure about the referendum result as the bookies on Thursday, with equities and sterling both slipping back during the afternoon following big climbs in the morning.

FTSE yo-yos as UK goes to the polls - Updated

The FTSE 100 finished trading on Thursday with a flourish though to end up 1.23% at 6338. The FTSE 250 closed 1.7% higher at 17,333.

Sterling painted a somewhat similar picture and was a marginal 0.62% up at $1.47 as equities trading ended in London. 

Earlier the index slipped a little in the first half hour of trading before setting off on a steep climb that saw it put on 70 points in an hour to reach 6365. At that point there was a 30 point slide before it began climbing again.  

The FTSE 250 was similarly mixed during the morning with peaks and troughs through the morning but ultimately heading into the afternoon around 300 points up at 17,350. Sterling was a clearer cut movement through the morning rising against the dollar fairly consistently to put on 1.37% to reach $1.49.

“As voters head to the polls today, the markets are pricing in less of a risk of exit than they were a week ago or even than they were back in April,” said Caroline Simmons, deputy head of the investment office at UBS Wealth Management. “At current market levels, the risk around the Referendum for financial markets is asymmetric. We believe that the FTSE 100 could rise by 5% over the next 12 months under a vote to remain, and the FTSE 100 could fall by over 10% over the next 12 months under a vote to leave,” she added.  “Sterling has moved up today, and we expect the currency markets to remain volatile to rumours as well as actual news flow over the next few days.”

“Amid restrictions to broadcasters, there is an eerie feeling in the city, with a nervous energy evident as we await the fate of the nation,” noted IG market analyst Joshua Mahony. “Whatever the result, volatility is likely to be the name of the game and rumours of private exit polls from the hedge funds means that there is likely to be some substantial swings as speculative positions are placed into a relatively illiquid market.” 

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Alex Sebastian

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Alex joined Portfolio Adviser in April 2014 and has been a financial journalist since 2008. He has previously held editorial positions at the Financial Times Group and Euromoney Institutional Investor. Alex is NCTJ qualified and has a degree in economics from the University of Sussex.



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