European stocks rallied on Monday morning after recent polls indicated that those backing Britain's continued membership in the European Union (EU) had pulled ahead of those seeking an exit.
Some analysts commented that the tragic killing of Labour lawmaker Jo Cox on Thursday had helped a shift in momentum back in favor of those seeking to remain in the EU. Britons will vote on Thursday to determine the country's future involvement in the EU.
Opinion polls are still pointing to a very tight race. The first poll published on Saturday, after Cox's murder, conducted by Survation for the Mail on Sunday newspaper showed that Remain, the term used to refer to Britons in favour of remaining within the EU, in the lead 45% to 42% in favour of exiting and 13% undecided. A YouGov poll in the Sunday Times had Remain on 44%, Leave on 43% and the balance comprised of 4% who said they wouldn't vote and 9% who said they didn't know. Still, another survey by YouGov for ITV had Leave up by two points, according to the BBC.
"Investors are feeling a lot more calm after the recent polls shows that Remain group has gained more popularity in the Brexit referendum campaign," Naeem Aslam, chief market analyst at Think Forex UK, said in a note. "Having said that, we need firm confirmation that public opinion has changed and it is leaning more towards the Remain group before we could see the current momentum continue. Many reputable institutions such the IMF, the BOE and many others have reverberated the same message over and over that Britain's future is stronger by staying within the EU block rather taking a divorce."
In equities, RBS ( RBS ) led gains in London, rising 7.3%, amid Europe-wide advances by banks and financial services stocks. Securities firm Hargreaves Lansdowne (HL.L) gained 7%. Home builders Barrat Developments (BDEV.L) and Taylor Whimpey (TW.L) both gained 6.1%.
Volkswagen (VOW3.DE) rose 4.7% in Frankfurt after Bloomberg reported citing anonymous sources the carmaker will submit its $10 billion plant to fix or recall about half a million cars in the US that had been equipped to cheat emissions tests. Bayer (BAYN.DE) advanced 2.5% after Reuters reported that it is in talks with investment banks about exploring the sale of its radiology business, which may be worth more than $3 billion. Adidas (ADS.DE) climbed 2.3% after a report by Sports Bild said that the sports company signed a new four-year sponsorship contract for the German soccer team, Reuters said.
Drugmaker Roche (ROG.VX) rose 2.7% in Zurich after it said it has a tool to help scientists detect the Zika virus, CNBC reported. French automotive supplier Valeo (VLOF.PA) gained 5.2% and telecom company Numericable (NUM.PA) gained 5.9% in Paris. Groupe Eurotunnel (GET.PA,) which operates the Channel Tunnel between Britain and France, gained 4.3% in Paris.
Europe's benchmark, the STOXX 600 pan-European index, rose 2.8%, the biggest jump since February, rising for a second day. The euro-region blue-chip STOXX 50 index gained 2.7%. The FTSE 100 in London gained 2.1%, the DAX in Germany rose 2.8% and the CAC 40 gained 2.7%.
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