Global stocks fade but sterling robust on eve of Brexit vote

Wed Jun 22, 2016 4:45pm EDT
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By Edward Krudy

NEW YORK (Reuters) - Global markets traded cautiously on Wednesday, a day before the United Kingdom votes on whether to stay in the EU, with Wall Street stocks easing lower and sterling inching up.

Oil fell back below $50 per barrel and the yen was down against the dollar, with the latest polls showing a slight tilt toward leaving the European Union when Britons go to the polls on Thursday.

The "Leave" campaign holds a 1-2 point lead over the "In" camp ahead of Thursday's membership referendum, according to surveys published by polling firms Opinium and TNS, reversing a tilt earlier this week toward "Remain."

Markets have been resilient so far this week, with investors unwilling to make big bets in either direction over the last two days. Opinion polls have led to volatility in asset prices, although Monday's large rally in "risk assets" has held as markets appear to lean toward the view that the United Kingdom will remain in the EU.

"I think the result of the Brexit vote is 50/50, and it will probably be very tight," said Olivier de Berranger, fund manager at French firm La Financiere de L'Echiquier, which manages around $9 billion in assets.

Sterling rose around 0.4 percent to $104.38, edging away from Tuesday's 5-1/2 month high of $1.4781. The pound, which briefly turned negative after the latest polls were released, has risen 5 percent since dropping to a three-month low of $1.4010 last Thursday.

Britain's main share index hit a two-week high on the eve of Thursday's vote before surrendering half the day's gains in the last minutes of trading.

U.S. stocks gave up morning gains and closed lower.   Continued...

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., June 15, 2016. REUTERS/Lucas Jackson