Shares as well as sterling are off to a flyer at the start of the week as the FTSE 100 gains 2.1% to 6,144 and Britain’s currency surges close to three cents against the dollar.

On the back of gains overnight in Tokyo, Shanghai, Hong Kong and Mumbai, the blue chip rally in London is led by banks and housebuilders in a continuation of Friday’s trading action.

Moving the other way, pharmaceuticals mid cap Circassia (CIR) sheds almost two-thirds of its value after its cat allergy treatment flopped in a trial.

Early gains on sterling – a pound now buys $1.4662 – are being driven by indicators showing Britain’s chance of leaving the European Union fell below 30% over the weekend.

Odds posted on financial and betting websites, as well as a weekend poll from Survation, indicate UK voters are leaning towards a vote to stay in the 28 member bloc.

GDP growth in Germany is also a factor in the Monday rally. Driven by increasing consumer spending, the world’s fourth-largest economy expanded 0.7% in the first quarter and is on track to grow 1.7% in 2016, according to the country’s Finance Ministry.

Blue chip movers in London include Royal Bank of Scotland (RBS), the FTSE 100’s biggest gainer, which is up 6.6% to 237p.

Housebuilders are also in demand: Barratt Developments (BDEV) gains 5.9% to 563p and Taylor Wimpey (TW) is up 5.9% to 186p.

Gold miners Randgold Resources (RRS) and Fresnillo (FRES) are the only fallers among London’s leading stocks.

There are also only 12 fallers on the FTSE 350, the biggest of which is Circassia.

Circassia slumps

Phase III clinical trials proved its cat allergy treatment does not work to the regulator’s specifications and a placebo produced a better result.

Read our take on the news here.

Imperial Innovations (IVO:AIM), a technology incubator which has an investment in Circassia, fell 6.6% to 406.1p.

Also in pharma, respiratory disease-focused drug developer Verona Pharma (VRP:AIM) rises 7% to 3p on completing an oversubscribed £44.7 million placing to fund clinical trials of a smokers cough treatment.

Wine specialist retailer Majestic Wine (WINE:AIM) fizzes 6.9% higher to 467.75p on better-than-expected full-year results, that clearly demonstrate new CEO Rowan Gormley's three-year turnaround strategy is on track.

Though adjusted pre-tax profit was down 11.9% to £15 million, reflecting the increased costs of the transformation programme, the Majestic Wine business saw positive like-for-like sales growth for the first time in four years, while online crowd funded retailer Naked Wines delivered record sales, driven by strong growth in the US, as well as a maiden profit.

We'll look at today's news in more detail here later.

A new ruby sales auction record sends Gemfields (GEM) up 2.3% to 39p. It has sold a mixture of high and low quality rubies from its mine in Mozambique for $44.3 million.

Kenmare Resources (KMR) rises 20% to 0.84p as lenders approve the miner’s financial restructuring plans.

Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account.

Issue Date: 20 Jun 2016