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London open: Stocks fall as support for Brexit grows
London stocks fell on Tuesday as fears over a possible vote by Britain to leave the European Union continued to drag on investor sentiment.
Polls this week have shown a growing support for Brexit ahead of the 23 June referendum, adding to worries about the impact on the economy.
A poll from Guardian/ICM, released late Monday, showed the Leave camp enjoyed a 53%-47% advantage, compared with a 52%-48% split reported two weeks ago.
According to the latest YouGov poll, published in The Times on Tuesday, support for Brexit jumped by three percentage points to 46% over the latest week, while backing for ‘Remain’ lost another three percentage points to 39%.
“One positive thing to come from the last few days is that markets finally appear to be pricing in the real possibility that the UK could vote out,” said Craig Erlam, senior market analyst at Oanda.
“The pound has been in freefall over the last week, a trend that could well continue between now and next Thursday if momentum remains with the leave campaign. At this rate, I wouldn’t be surprised to see the pound trading at 1.35 against the dollar before the vote even takes place, although that would require another massive push by the leave campaign and another poor show from remain.”
Meanwhile, UK inflation data will also be in focus when it is released at 0930 BST. Economists expect a slight pick-up in May as oil prices recover.
Also on the agenda, Eurozone industrial production figures at 1000 BST, Eurozone employment data at 1000 BST, US retail sales at 1330 BST and US business inventories at 1500 BST.
Company-wise, Ted Baker shares gained after reporting a 12.7% increase in first quarter retail sales and saying it expects full year results to meet expectations.
Go-Ahead plunged after saying it expects margins at its contract on the Govia Thames Railway to be lower than previously anticipated.
FirstGroup jumped after reporting a rise in full-year profit despite a drop in revenue following the loss of rail franchises.
Housebuilders, including Taylor Wimpey, Crest Nicholson and Barratt Developments, were in the red on worries about Brexit.
