* Risk appetite falls in afternoon trading
* Britain's FTSE closes off highs after new referendum poll
* "Leave" leads before UK referendum in latest polls
* Wall St dips with all eyes on British referendum
(Updates to U.S. market close)
By Edward Krudy
NEW YORK, June 22 (Reuters) - Global markets traded
cautiously on Wednesday, a day before the United Kingdom votes
on whether to stay in the EU, with Wall Street stocks easing
lower and sterling inching up.
Oil fell back below $50 per barrel and the yen was down
against the dollar, with the latest polls showing a slight tilt
towards leaving the European Union when Britons go to the polls
on Thursday.
The "Leave" campaign holds a 1-2 point lead over the "In"
camp ahead of Thursday's membership referendum, according to
surveys published by polling firms Opinium and TNS, reversing a
tilt earlier this week towards "Remain."
Markets have been resilient so far this week, with investors
unwilling to make big bets in either direction over the last two
days. Opinion polls have led to volatility in asset prices,
although Monday's large rally in "risk assets" has held as
markets appear to lean towards the view that the United Kingdom
will remain in the EU.
"I think the result of the Brexit vote is 50/50, and it will
probably be very tight," said Olivier de Berranger, fund manager
at French firm La Financiere de L'Echiquier, which manages
around $9 billion in assets.
Sterling rose around 0.4 percent to $104.38 GBP= , edging
away from Tuesday's 5-1/2 month high of $1.4781. The pound,
which briefly turned negative after the latest polls were
released, has risen 5 percent since dropping to a three-month
low of $1.4010 last Thursday.
Britain's main share index hit a two-week high on the eve of
Thursday's vote before surrendering half the day's gains in the
last minutes of trading.
U.S. stocks gave up morning gains and closed lower.
The Dow Jones industrial average .DJI fell 48.9 points, or
0.27 percent, to 17,780.83, the S&P 500 .SPX lost 3.45 points,
or 0.17 percent, to 2,085.45 and the Nasdaq Composite .IXIC
dropped 10.44 points, or 0.22 percent, to 4,833.32.
The MSCI's all-country world stock index .MIWD00000PUS
edged up 0.1 percent but has still gained 2.1 percent so far
this week.
Putting a floor under markets, betting patterns with
bookmakers have shown a re-opening of the gap in favor of
"Remain" after the murder last week of a pro-EU lawmaker
appeared to derail the "Leave" campaign.
Europe's stock markets also pared gains into the close.
Europe's FTSEuroFirst index of 300 leading shares was up 0.5
percent .FTEU3 , Germany's DAX was up 0.6 percent .GDAXI ,
France's CAC 40 .CAC40 up 0.3 percent and Britain's FTSE 100
up 0.6 percent .FTSE .
The yen slipped 0.3 percent against the dollar JPY= to
104.41 yen, and the euro rose 0.5 percent to $1.1296 EUR= .
For the latest Reuters news on the referendum including full
multimedia coverage, click
Fed chief Janet Yellen said on Tuesday the risk of Brexit
needed watching "very carefully," and added that the central
bank's ability to raise interest rates this year may hinge on a
rebound in hiring
Yellen concluded her testimony in front of the U.S. House
Financial Services Committee on Wednesday, with little further
indication about the central bank's thinking on the U.S. economy
and the timing of interest rate hikes.
Benchmark 10-year U.S. bond prices edged higher, yielding
1.69 percent US10YT=RR . Germany's 10-year yield edged up a
basis point to 0.06 percent EU10YT=RR .
Gold cut some earlier losses after the polls but edged lower
into the afternoon. Spot gold XAU= fell 0.2 percent to a
near-two-week low of $1,265.38 an ounce.
Brent crude futures LCOc1 fell 74 cents to $49.88 per
barrel. The new benchmark August contract for U.S. crude futures
CLc1 fell 1.5 percent to $49.09.
Reuters' new Live Markets blog on European and UK stock markets
reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Asset performance in 2016 http://reut.rs/1WAiOSC
Currencies in 2016 http://link.reuters.com/tak27s
Britain EU referendum polls http://tmsnrt.rs/1Ke31HF
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