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European stocks traded higher on Thursday with investors remaining cautious as UK voters go to the polls for a referendum on European Union (EU) membership.

The pan-European STOXX 600 was up 0.48 percent.

Markets appear cautiously optimistic ahead of the UK vote on EU membership, although opinion polls ahead of the vote wavered between giving the leave side and the remain side the lead.

Latest polls by ComRes, conducted for the Daily Mail newspaper and ITV television, and YouGov for The Times newspaper in London, showed a last-minute increase in the number of voters supporting the remain campaign.

The pound rose to a six-month high against the dollar following the polls, touching USD 1.4847. It was trading at USD 1.4793 around 5.30 a.m. London time.

Voting will take place between 7:00 a.m. and 10:00 p.m. London time – during which media reporting restrictions are in place - and after the votes have been counted in all 12 regions, a result could be announced from 3:00 a.m. local time onwards.

Investors were more cautious in Asia, where stocks traded mixed on Thursday, following losses in US stocks and as markets remained on edge ahead of the UK vote.

Banks in focus

The banking sector was in focus for investors on Wednesday. In Italy, Banco Popolare said it had raised the 1 billion euros (USD 1.1 billion) it required to complete a merger with Banca Popolare di Milano, sending shares in both lenders higher.

Shares of Unicredit were mildly higher as the search for a new chief executive continues. La Repubblica reported that Fabio Innocenzi, head of UBS in Italy, is a potential candidate.

Deutsche Bank shares were slightly higher after it struck a deal with the German works council to shut down almost a quarter of its branches in Germany, Reuters reported, citing sources.

And RBS was in the black after it was reported that the lender had received bids for its Greek ship finance business.

Meanwhile, the European Central Bank (ECB) held off on sanctions against Portuguese bank BPI for its exposure to Angola as Spain's Caixabank looks to take a majority stake in the lender. Caixabank now has four months to resolve BPI's issue and finalize its bid for the lender. Shares of Caixabank were lower.

Sweden's Nordea was sharply lower after JPMorgan cut its price target for the stock.

Elsewhere, Greek banks have got their foot back in the door with the ECB, which reinstated the waiver allowing Greek lenders to access its funding operations. This means that Greek banks will soon be able to access the ECB's cheap funding again, having lost that access last year.

The ECB said its governing council had acknowledged "the commitment of the Greek government to implementing

Shares of Greece's Alpha Bank and Eurobank Ergasi rallied.

Tesco rallies

Meanwhile, Tesco reported same-store sales in the UK were up 0.3 percent in its first fiscal quarter, sending shares in the supermarket giant higher. Positive news from Tesco also lifted other retails stocks including Ocado and rival supermarket chain WM Morrison.

Shares of German utility RWE rallied after Barclays raised its price target for the stock, while E.ON was also in the black after the bank upgraded its outlook on the company's stock from "equal weight" to "overweight".

Mining stocks also got a boost on Thursday with Glencore leading the way. And Arcelormittal was higher after JPMorgan raised its price target for the stock.

On the data front, Markit's monthly composite purchasing managers index (PMI) for June for France fell to 49.4 from 50.9 in May, suggesting business activity fell in the country.

And the flash purchasing manager's index (PMI) for the euro zone showed that business activity in the 19-country euro zone fell to 52.8 in June from a revised figure of 53.1 in May, according to Markit.

First Published:Jun 23, 2016 3:25 PM IST