- Stoxx 600 Tuesday capped biggest three-day gain since August
- Odds of victory for ‘Remain’ campaign still seen about 78%
European stocks pared gains in the final minutes of trading as a fresh poll damped investor optimism that the U.K. will vote to stay in the European Union.
RSA Insurance Group Plc rose 2.1 percent, leading a gauge of insurers to the best performance of the 19 industry groups on the Stoxx Europe 600 Index after Barclays Plc said the company is confident of meeting its 2018 targets and well placed in the event of a Brexit. Rio Tinto Group and Glencore Plc paced miners higher as base metals climbed.
The Stoxx 600 rose 0.4 percent to 341.32 at the close of trading. The equity gauge trimmed gains of as much as 1 percent after a new poll showed a slight lead for the “Leave” campaign. While the vote appears too close to call, betting shops are placing the odds for “Remain” at about 78 percent, according to Oddschecker data. They see only about a one-in-four chance of a secession. The FTSE 100 Index gained 0.6 percent today.
“It’s clear that betting odds are skewed towards ‘Remain’ at the moment, which is the main data the market will be moving on until there is a clear outcome,” said Daniel Murray, head of research at EFG Asset Management in London, which oversees about $12 billion in assets. “Even so, ‘Remain’ is not completely priced in as the costs of a ‘Leave’ could be quite large. The biggest risk is waking up on Friday to an uncertain result.”
The Stoxx 600 began a rebound on Friday as Brexit concern eased amid a suspension in campaigning following the murder of Labour Party lawmaker Jo Cox. The equity gauge has struggled to maintain momentum after rallying 16 percent from a February low to an April 20 high. It’s still down 1.8 percent in June, on track for its first monthly drop in four.
Among stocks moving on corporate news today, Merlin Properties Socimi SA gained 3.9 percent after agreeing to a merger with Metrovacesa SA to create the largest Spanish property rental group. Colruyt SA dragged a measure of retailers to among the worst performances on the Stoxx 600, tumbling 10 percent after KBC Groep NV cut its rating on the Belgian company to the equivalent of sell, citing margin pressure and intense competition.