Image from shutterstock

Stocks rallied with sterling, crude advances for a second day

By Margaret Yang, CMC Markets

Equities – A risk-on sentiment following a reversal of the Brexit poll results has led to a surge in equities yesterday. The Euro Stoxx index soared 3.29%, marking its biggest jump in nine months. The Hang Seng Index rallied 1.69% to 20,510 points. The S&P 500 index climbed 0.58%, with the industrials and energy sectors outperforming.

Singapore’s Straits Times Index climbed 1.36% to 2800 points. The immediate support and resistance levels are at 2,730 and 2,855 points.

Today we may see a consolidation following yesterday’s rally. Market sentiment may change tone any time, because anything could happen before the result of the UK’s EU referendum is announced on 24 June.

FX – GBP/USD soared over 330 pips to 1.4720 yesterday before coming back to the 1.4650 area this morning. This is the biggest gain in eight years for sterling after a series of polls showed the ‘remain’ camp taking the lead.

According to the Financial Times’ latest poll, there is equal support for ‘remain’ and ‘exit’, both at 44% as at this morning.

Commodities –A weaker dollar has sent crude oil prices higher. The WTI crude oil future rallied for a second day to $49.70 and is getting closer to the resistance level at $50.00. The gold price continues to consolidate near the $1,286 area as there is less demand for safety.



Margaret Yang Yan, CFA, is a market analyst for CMC Markets Singapore.