TORONTO – Major stock markets in Canada and the U.S. soared to reach three-digit gains Thursday amid growing optimism that Britain will ultimately decide to remain in the European Union.
The S&P/TSX composite index in Toronto climbed 127.57 points or 0.91 per cent to 14,131.38, as major gains in metals, energy and health-care stocks buoyed the commodity-driven index.
New York markets were also solidly ahead, with the Dow Jones industrials rising 230.24 points to 18,011.07, while the broader S&P 500 added 27.87 points to 2,113.32. The Nasdaq composite advanced 76.72 points to 4,910.04.
Global stock indexes have been volatile in the past few weeks as sentiment swung back and forth on whether Britain will leave the EU and what that decision could mean for the stability of the European economies.
“The polls have been pretty close,” said Colin Cieszynski, chief market strategist at CMC Markets Canada.
“I’ve seen in the last 24 hours, some showing ‘Remain’ leading, some showing ‘Leave’ leading and some showing a dead heat. Anyway, the ones showing a lead were very, very small leads. It would be very hard for anybody to say who will win. Nobody knows.”
Either way, Cieszynski said stock markets will likely head higher if Britain votes to stay in the 28-nation economic union, and will pull back if the country decides to exit.
But in the end, it’s unclear what the long-term effects of Britain’s departure would be. Some say the effects can be anything from resulting in multinational companies currently based in London to leave for other European countries to inspiring other countries in the EU to hold their own referendums.
“The markets prefer stability over uncertainty,” he said. “This is one of the really big events but at the same time, you’ll see some uncertainty and volatility right through the summer.”
British and Irish citizens ages 18 and over who reside in the United Kingdom, as well as U.K. residents of Commonwealth countries who have the right to live in the country, can vote in the referendum.
The Electoral Commission says a record number of nearly 46.5 million voters were registered for the referendum by Tuesday.
Polling stations will close at 5 p.m. EDT, with official results expected to be announced at about 2 a.m. EDT Friday.
The enthusiasm over the British vote, often referred to as “Brexit,” spilled over into currency markets as the Canadian dollar gained 0.41 of a U.S. cent at 78.304 cents US.
In commodities, the August contract for benchmark North American oil rose 98 cents to US$50.11 a barrel and July natural gas added two cents to US$2.70 per mmBTU. August gold was down $6.90 at US$1263.10 a troy ounce, while July copper gained three cents to US$2.16 a pound.
— With files from The Associated Press
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