REUTERS

(REUTERS)

Stocks Gain Broadly, Pound Falls on EU Exit Fears

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As of 8:00 a.m. ET, Dow Jones Industrial Average futures were 175 points higher, or 1.07% to 16530. S&P 500 futures gained 20 points, or 1.03% to 1934, while Nasdaq 100 futures added 47 points, or 1.12% to 4207.

(The following is the original story published by Reuters)

Shares rose in Europe and Asia on Monday, boosted by higher oil and commodity prices, while sterling fell sharply against the dollar and euro on concerns Britain may vote to leave the European Union.

U.S. stock index futures signaled Wall Street would open about 1.1 percent higher.

The British pound hit a seven-year low of $1.4067, down 2.3 percent on the day, putting it on track for its biggest daily percentage loss since February 2009, while the euro rose 1.4 percent to 78.31 pence.

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London Mayor Boris Johnson, a political heavyweight in the ruling Conservative Party, said on Sunday he would support the campaign to leave the EU in a June 23 referendum, putting him at odds with Prime Minister David Cameron.

Cameron, who struck a deal to reform Britain's relations with the EU last week, was due to make his case for staying in the EU in parliament later on Monday.

With dealers expecting choppy trading in the run-up to the vote, the cost of hedging against weakness in sterling hit its highest in more than four years.

"The 'Out' camp were struggling to get a figurehead who was popular and Boris has given them that boost," said Alvin Tan, a strategist with French bank Societe Generale in London.

"I think there is genuine worry that Britain might vote to leave and the uncertainty is going to rise into the referendum."

British shares, however, rose in line with other European bourses. London's resources-heavy FTSE 100 index was up 1.3 percent.

"Brexit is not a story for equities at the moment but that might change ... For sure the probability of Brexit has increased after the positioning of Boris Johnson," said Jurgen Michels, chief economist at BayernLB in Munich.

Ten-year yields on UK government debt  rose 1 basis point to 1.42 percent, while euro zone benchmark German 10-year yields  were flat at 0.2 percent.

The pan-European FTSEurofirst 300 share index rose 1.4 percent, led by miners, though a 2.9 percent fall in HSBC after the bank's 2015 profit fell short of expectations took its toll. HSBC earlier fell close to 5 percent.

Stocks also shrugged off a survey showing private sector business activity in the euro zone increased at its weakest pace in more than a year this month, according to Markit's composite flash Purchasing Managers' Index.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 1 percent, having rebounded more than 4 percent last week.

China's benchmark indexes rose 2 percent as investors welcomed Beijing's decision to replace its top securities regulator and on signs the government was stepping up its economic stimulus efforts.

Tokyo's Nikkei closed up 0.9 percent, helped by a weaker yen, which fell 0.6 percent to 113.20 per dollar.

The euro fell 1 percent to $1.1020, its weakest for almost three weeks.

RIGS

Oil prices rose as a reduction in the number of U.S. rigs was expected to lead to lower output. Global benchmark Brent crude rose 4 percent, or $1.31 a barrel, to $34.32.

Russia and the Organization of the Petroleum Exporting Countries (OPEC) proposed to freeze production at January levels, though analysts said this would not help cut oversupply which has seen prices fall 70 percent since mid-2014.

Copper  hit a two-week high on hopes for a revival in Chinese demand. The metal traded up 1.3 percent on the day at $4,682 a tonne. Zinc hit a four-month high on worries over a potential shortage.

Gold fell as stocks and the dollar rose. It was down 2 percent at $1,205 per ounce.

(Additional reporting by Saikat Chatterjee in Hong Kong, Patrick Graham and Anirban Nag in Londn and Danilo Masoni in Milan; Editing by Catherine Evans and John Stonestreet)