Here’s why the ASX 200 is skyrocketing today

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Investors have endured a nerve-racking couple of weeks on the local exchange in relation to Brexit fears and various other important economic events around the world, which saw Australian shares plunge last week.

However, shares are on the rise again in a big way today. As it stands, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has risen 72 points or 1.4% to trade at 5,234 points, after slipping as low as 5,141 points on Thursday last week.

The broader ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) has also risen 1.3% and is hovering at 5,314 points. It was trading near 5,500 points late last May.

Indeed, one of the biggest uncertainties facing global share markets right now is Britain’s upcoming referendum vote to either stay in, or exit, the European Union. The event, which has been dubbed ‘Brexit’, will almost certainly be a close vote which leaves the door wide open for uncertainty to creep into the markets.

The fear is that, should Britain elect to leave the EU, it would be separating itself from its largest trade market and potentially harming the future of its own as well as Europe’s economy. What effect that would have on the global economy is unclear.

It appears as though the remain campaign may have built some momentum in recent days, which may be playing a role in the soaring share market today. Unfortunately, this has partially been attributed to the tragedy surrounding the murder of Labour MP Jo Cox in Britain last week, who had been campaigning to keep Britain as part of the European Union.

Plenty can change in four days, and while odds for stay and leave both remain mostly on par, the vote could still go either way. However, investors are clearly growing more optimistic that Brexit will be averted, which is having a positive effect on local shares today.

BHP Billiton Limited (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) are two of the biggest winners so far, particularly after a strong lift in oil prices overnight as well. The pair have risen 3.4% and 4.7%, respectively.

The banks are on fire as well. Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group (ASX: ANZ) have lifted 2.3% and 2.2%, respectively, while Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB) have gained 2.4% and 1.8%, respectively.

Unsurprisingly, the gold miners aren’t faring so well (after all, gold tends to rise as a result of uncertainty, but falls when the market becomes less anxious). Newcrest Mining Limited (ASX: NCM), Regis Resources Limited (ASX: RRL) and Northern Star Resources Ltd (ASX: NST) are the three worst-performing shares on the market, losing between 2.7% and 3.9% each.

Although there is still uncertainty regarding which way Britons will elect to vote on 23 June, now could still be a great time for long-term investors to be on the lookout for shares trading at reasonable prices. After all, anything can happen in the short term, but volatility will pass in the long run, rewarding those investors who kept their cool.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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