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Published on: Thursday, June 23, 2016

US stocks have dipped in low trading volume, with traders focusing on Thursday's referendum on whether Britain will remain part of the European Union.

Stocks rose early on Wednesday after data showed US home resales rose in May to a more than nine-year high, adding to retail sales and international trade data that painted an upbeat picture of the economy in the second quarter.

But the S&P 500 once more hit a ceiling at the 2,100 level, which has been an area where sellers cluster.

Attention remained on Britain's Thursday vote.

A poll published on Wednesday showed a statistical tie, with the 'Leave' camp with 45 per cent, just one point ahead of 'Remain', and nine per cent undecided. Oddsmakers, however, showed a clear advantage for the 'Remain' camp.

"I go with the betting odds, that's the better indicator," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management in New York.

He said despite not holding "a huge amount of risk" heading into the vote he is slightly overweight US stocks.

"Earnings revisions are up, oil prices are at a sweet spot, retail sales have been strong; once you get past this unforecastable event (the referendum), people will put cash to work in the US equity market," Zemsky said.

Investors also kept an eye on US Federal Reserve Chair Janet Yellen's second day of testimony to Congress.

She repeated her speech from Tuesday, in which she played down the risk of a recession, but warned that the British vote and a US hiring slowdown posed risks to the economic outlook.

The Dow Jones industrial average fell 48.9 points, or 0.27 per cent, to 17,780.83, the S&P 500 lost 3.45 points, or 0.17 per cent, to 2,085.45 and the Nasdaq Composite dropped 10.44 points, or 0.22 per cent, to 4,833.32.

LONDON - 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.

Europe's stock markets also pared gains into the close.

Europe's FTSEuroFirst index of 300 leading shares was up 0.5 per cent, Germany's DAX was up 0.6 per cent, France's CAC 40 up 0.3 per cent and Britain's FTSE 100 up 0.6 per cent.

Stocks and sterling rose while the safe-haven assets gold and bonds slipped on Wednesday, as investors grew more optimistic Britain would vote to remain in the European Union in its referendum on Thursday.

Basic resource stocks were among the biggest gainers in Europe, lifted by an increase in the price of oil almost 1 per cent.

European Central Bank President Mario Draghi said on Tuesday that Britain's referendum was adding uncertainty to markets, and that the ECB was ready to act with all instruments if necessary.

HONG KONG - MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, its fourth straight daily gain, but a strong yen caused Japan's Nikkei to fall 0.6

percent.

The strength of the yen, often considered a safe haven, countered the broader increase in risk appetite across financial markets a day before Britain's EU referendum.

"In recent sessions, markets have been reacting to every indicator, opinion poll and betting odds alike. Sterling, the FTSE 100 and the gilt market are all (relatively) flat,

levelling off from some of the cautiously optimistic rallies earlier in the week," said Dean Turner, economist at UBS Wealth Management.

The Hang Seng index rose 0.6 per cent, to 20,795.12, while the China Enterprises Index gained 0.7 per cent, to 8,763.11 points.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.9 per cent to 3,133.96 points, while the Shanghai Composite Index also gained 0.9 per cent to 2,905.55 points.

WELLINGTON - The S&P/NZX 50 Index fell 57.66 points, or 0.84 per cent, to 6,781.73.


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