FTSE soars as Remain campaign recovers but gold and silver miners slide

Discussion in 'Market News' started by Lily, Jun 20, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Randgold Resources and Fresnillo lose ground but banks lead market higher

    With the Remain campaign regaining some ground ahead of this week’s referendum on whether the UK stays in the European Union, leading shares and sterling have bounced decisively back from recent lows.

    But as investors move once more into riskier assets, gold and silver miners are being left out in the cold. Randgold Resources is down 135p or 2% at £64.75 while Fresnillo has fallen 6p to £12.21, the only two losers in the leading index.

    UK financials and property are outperforming this morning on the back of weekend Brexit polls showing a shift back in favour of Remain. This has resulted in a surge in buying interest for the pound sterling and a relief rally for battered financials (banks, insurance) and housebuilders as investors price in a lower probability of event-risk attached to a UK exit from the European Union. Polls last week suggested the Leave camp taking an increasing lead which sent the currency and UK equities significantly lower given the more uncertain outlook

    The weekend news has thus served as a starting pistol for investors to wade in and start bargain hunting, re-fuelling hopes that the status quo will prevail. And while last Thursday’s tragic murder of Jo Cox look is being singled out as a turning point in the campaign, note some of the aforementioned poll data was taken before the MPs death. This suggests the swing in opinion may not simply be one of sympathy. It could be a combination of this and voter fatigue with the electorate tiring of an increasingly ugly debate.

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