LONDON MARKET OPEN: Pound Slides; G4S Says Employee Is Orlando Killer

LONDON (Alliance News) - Shares in London were down Monday morning, with concerns surrounding the EU referendum next week hitting investors confidence, as well as the pound, after a poll published Friday evening gave the Leave campaign a 10 percentage-point lead.

The FTSE 100 was down 0.4%, or 24.27 points, at 6,091.49 early Monday. The negative open followed two consecutive sessions in the red, with the blue-chip index losing 3.3% since Thursday - including the decline on Monday so far.

The FTSE 250 was down 1.0% at 16,664.42 and the AIM All-Share off 0.2% at 738.39.

Accendo Markets Michael van Dulken said the negative open in London "comes as risk aversion remains the stance of choice".

"Anxiety persists about the risks of a UK vote to leave the EU and traders prepare themselves for a hat-trick of central bank updates this week," noted van Dulken.

The US Federal Reserve will end its two-day monetary policy meeting on Wednesday with an interest rate announcement, while the Bank of Japan and the Bank of England will both publish their respective decisions on Thursday.

Uncertainty surrounding the EU referendum and doubts about the state of the global economy prompted a general risk-off sentiment among investors on Friday, with the pattern repeating Monday morning.

An ORB poll for the Independent newspaper giving the UK leave campaign a 55-45 lead in the EU vote hit the pound hard on Friday evening, but sterling slid further on Monday, touching a low of USD1.4159 in early trade.

The pound was quoted at USD1.4196 after the London equities open Monday, compared to USD1.4336 at the London close Friday. The currency has seen a sharp decline against the dollar since reaching USD1.4660 on Tuesday, but is still above the USD1.3834 multi-year low seen in February.

UK-listed financial stocks were hit hard in the FTSE 100 Monday, with Standard Chartered down 1.8% and Barclays down 1.5%. Insurers Legal & General Group and Standard Life were falling 1.4% and 1.3%, respectively.

As investors looked for safe haven assets, gold was up, quoted at USD1,281.49 shortly after the London equities open, compared to USD1,268.40 at the equities close Friday. Gold miners Randgold Resources and Fresnillo were the best blue-chip stock-market performers, up 1.6% and 0.7%, respectively.

FTSE 100-listed BT Group's chairman and chief executive, along with union leaders, are sending a joint letter to staff saying they want the UK to stay in a reformed European Union, the BBC reported Monday.

The leaders of the CWU and Prospect unions, which have members among BT's 81,400 staff, will join the BT bosses to say the vote will have a big impact on the company. Whilst they will urge staff to vote, they will say it is up to them how they vote at the upcoming referendum.

Shares in BT were down 1.8%.

In the FTSE 250, shares in Hiscox were up 0.8% after Credit Suisse initiated the specialty insurer with an Outperform recommendation, according to traders. Meanwhile, traders also said Citigroup lifted Restaurant Group to Neutral from Sell, sending its shares up 0.4%.

At the other end of the index, G4S was down 5.1%. The security services company G4S said Omar Mateen, the man who perpetrated a mass shooting in a nightclub in Florida early Sunday, had been employed by the company since September 2007. G4S said that Mateen was off-duty at the time of the incident.

"Mateen underwent company screening and background checks when he was recruited in 2007, and the check revealed nothing of concern. His screening was repeated in 2013 with no findings," the company said in a statement.

In Asia, the Japanese Nikkei 225 index fell 3.5%, while the Shanghai Composite dropped 3.2%. The Hang Seng index in Hong Kong was falling 2.7%.

Ahead in a light economic calendar Monday, the UK leading economic index is due at 1430 BST.

By Daniel Ruiz; danielruiz@alliancenews.com

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