Global equities gained the most in three months after the pound rallied and Treasuries fell on signs the U.K will stay in the European Union.
The Stoxx Europe 600 Index rose to its highest since August, while S&P 500 Index climbed the most in a month before gains faded in the final hour of trading amid speculation the rally had gone too far ahead of Thursday’s vote and Federal Reserve Chair Janet Yellen Tuesday testimony.
Oil rose with industrial metals, while gold plunged for a second day.
“It’s more an unwind of the panic we saw last week,” Mark Kepner, a managing director and equity trader at Themis Trading LLC in Chatham, New Jersey, said by phone. “It seems to be because of what’s changing in the vote. The market was starting to prepare for a Brexit and it seems the polls in the U.K have changed since late last week.”
The MSCI Emerging Markets Currency Index rose 0.8 percent, and a gauge of commodities rallied for a second day.
While, the MSCI All-Country World Index gained 1.7 percent at 4 p.m. in New York, for its biggest surge since March 11.
“The markets have always been more comfortable with the U.K. remaining in the European Union, hence the boost to risk sentiment now that the ‘Remain’ camp’s campaign appears to be back on track,” Kathleen Brooks, London-based research director at Gain Capital Holdings Inc., wrote in a note.