Stocks, Pound Rally as Britain Leans to EU Remain Vote

World stock markets surged Monday, led by rallying banking shares, on growing expectations that Britain will vote to remain part of the European Union in Thursday's referendum.

The British pound was meanwhile sharply higher against the euro and dollar.

"Weekend Brexit polls and bookies' odds suggest the Remain campaign regaining some lost ground and in some cases re-taking the lead," said Mike van Dulken, head of research at Accendo Markets.

"A higher chance of the UK voting to stay is a relief for markets -- equities and the pound sterling -- that had been preparing themselves for a Leave vote and the uncertainty it could inflict from a financial, economic and political standpoint."

Around 1130 GMT, London's benchmark FTSE 100 index jumped 3.3 percent compared with the close on Friday.

Frankfurt's DAX 30 index soared 3.5 percent and the Paris CAC 40 won 3.4 percent in value.

On foreign exchange, the pound rose around 2.0 percent to hit a three-week high at $1.4673, before easing back. The euro hit a two-week low versus sterling at 77.31 pence.

"If sterling is anything to go by, markets well and truly think voters have swung in favor of Remain," said Joe Rundle, head of trading at ETX Capital.

Safe haven assets, the yen and gold, meanwhile retreated Monday after strong gains last week.

Despite the change in sentiment, the average of the last six British European Union referendum polls put the Remain and Leave camps neck-and-neck at 50-50, excluding undecided voters, according to the What UK Thinks website.

World markets had slid early last week as polls showed Leave in the lead, but Tokyo closed up 2.3 percent Monday, adding to gains of one percent ahead of the weekend pause.

"As the UK steps in the crucial Brexit week, we are prepared for... choppy market conditions," said Ipek Ozkardeskaya, market analyst at London Capital Group.

Banking share prices rocketed Monday, with Royal Bank of Scotland up 7.3 percent in London. Barclays won 6.1 percent, while BNP Paribas advanced 4.3 percent in Paris deals.

Analysts said the Remain camp won some support after the murder last week of British MP and Remain campaigner Jo Cox.

British lawmakers were Monday set to pay tribute to Cox, in a rare show of unity as the EU referendum campaign enters its final stretch.

The vote on Thursday could see Britain become the first country to leave the 28-member European Union.

- Key figures around 1130 GMT -

London - FTSE 100: UP 3.3 percent at 6,219.30

Frankfurt - DAX 30: UP 3.5 percent at 9,968.20

Paris - CAC 40: UP 3.4 percent at 4,338.29

EURO STOXX 50: UP 3.3 percent at 2,944.10

Tokyo - Nikkei 225: UP 2.3 percent at 15,965.30 (close)

Shanghai - Composite: UP 0.1 percent at 2,888.81 (close)

Hong Kong - Hang Seng: UP 1.7 percent at 20,510.20 (close)

New York - DOW: DOWN 0.3 percent at 17,675.16 (close)

Euro/dollar: UP at $1.1325 from $1.1280 late Friday

Pound/dollar: UP at $1.4626 from $1.4348

Dollar/yen: UP at 104.57 yen from 104.19 yen