Prior to the upcoming referendum in the UK on the country's membership in the EU, trading activity in world markets has dropped. Investors are waiting for the results of the voting in the UK, which will be known on Friday at 04:00 (GMT 2), and only after this they will make significant changes to the portfolios.
The results of the last polls in the UK showed that the number of supporters of the country's exit from the EU and those who are going to vote to continuing British membership in the Union is almost equal. However, the number of people who prefer to stay in the EU is slightly bigger. This fact has boosted European stock market. The British FTSE 100 index closed on Tuesday with the increase of 0.4%.
At the end of today’s Asian session, Shenzhen Composite rose by 1.7%, ChiNext Price -by 2.5%, Shanghai Composite - by 0.9%, Japanese Nikkei Stock Average fell by 0.6%.
On Tuesday, trading on the U.S. stock market was relatively quiet. The US stock indices have remained in the narrow range for the second day, the price of the S&P500 index is near the level of 2085.0.
In her speech on Tuesday, the head of the US Fed, Mrs. Janet Yellen reiterated that the growth of production, recruitment, investments and profits of companies have stopped or slowed down, which does not allow the Fed to determine the term of the next rate hike. The soft tone of her speech supported US stock market; however, investors’ attention is focused on the referendum in the UK. In the near future, situation in the European market, as well as the others will depend on the outcome of the referendum
A financier George Soros said in his article in “Guardian” that if the UK exits from the EU, the Pound will sharply fall. Soros said that the decline will be more rapid than in 1992, when he earned about a billion USD by selling the British currency.
It is expected that the decline in the British and European stock market will not be so dramatic.