Arab Today, arab today european markets rally as scots reject independence
Last Updated : GMT 16:22:08
Arab Today, arab today
Arab Today, arab today

European markets rally as Scots reject independence

Arab Today, arab today

Arab Today, arab today European markets rally as Scots reject independence

European markets rally
London - AFP

Europe's main stock markets jumped on Friday as investors welcomed news that Scotland has voted to reject independence from the United Kingdom.
By mid-afternoon, London's benchmark FTSE 100 index added 0.61 percent to 6,860.70 points, while sterling hit a two-year euro high in anticipation of victory for the "No" campaign.
Frankfurt's DAX 30 advanced 0.25 percent to 9,822.49 compared with Thursday's closing level and in Paris the CAC 40 gained 0.15 percent to 4,471.47 points.
Markets opened solidly on Wall Street.
"European equities have surged out of the starting blocks as news that the Scottish Independence attempt has failed," said Capital Spreads dealer Jonathan Sudaria.
Scotland rejected independence in a referendum that left the centuries-old United Kingdom intact but paved the way for a major transfer of powers away from London.
Despite a surge in nationalist support in the final fortnight of the campaign, the "No" camp secured 55.30 percent of the vote against 44.70 percent for the pro-independence "Yes" camp in Thursday's referendum.
- Sterling unsteady -
The British pound began Friday strongly before recoiling slightly. The euro tumbled to 78.10 pence on initial returns pointing to a victory for the "No" camp. That was the lowest level since July 2012 and compared with 78.82 pence late in New York on Thursday. It later recovered to 78.65 pence.
At the same time, sterling jumped to a two-and-a-half-week peak at $1.6525, before dipping to $1.6356.
The British pound had come under severe pressure in recent weeks as opinion polls had showed rising support for the "Yes" campaign.
In the event of independence, First Minister Alex Salmond and his Scottish National Party (SNP) had wanted Scotland to continue using the pound and enter into a formal, euro-style monetary union with what would remain of the United Kingdom.
But the British government had rejected such an arrangement.
On the London stock market, Britain's Royal Bank of Scotland and Lloyds Banking Group saw their shares jump after both lenders scrapped contingency plans to switch operations to England in the event of Scottish independence.
RBS shares rallied 2.80 percent to 367.2 pence, and Lloyds gained 1.03 percent to 76.65 pence.
"The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a 'Yes' vote," said an RBS spokesman.
Other companies with major Scottish operations also leapt higher in London.
Domestic gas and electricity provider Scottish and Southern Energy gained 1.05 percent to 1,537 pence.
Engineering company Weir Group won 0.99 percent to 2,656 pence.
"A relief rally is in the making in UK markets, and key areas to watch will be the banks such as RBS and Lloyds, as well as big Scottish firms," said Chris Beauchamp, analyst at IG trading group.
"Investors in these firms will be relieved that management will be able to devote their time to business performance, rather than fretting about contract changes or headquarters moves."
Markets on Wall Street started Friday brightly, with the Dow Jones Industrial Average climbing 0.37 percent to 17,330.30 points and the tech-rich Nasdaq gaining 0.29 percent to stand at 4,606.98 minutes into trading.
The broad-based S&P advanced 0.33 percent to reach a new record high of 2,017.93.
- British bonds climb -
The yield on British 10-year debt rose as many investors had bought bonds as a safe-haven asset.
The rate of return rose to 2.603 percent at 0700 GMT, from 2.575 percent at Thursday's close.
Prior to the referendum result, investors were anxious over the economic uncertainty which would have followed a "Yes" result, dealers said, and had been buying bonds as a safe-haven asset.
"While the outcome of the Scottish referendum hasn’t necessarily come as a huge surprise... it certainly removes uncertainty which has put off of some investors from pouring money into stocks in recent weeks," added trader Markus Huber at broker Peregrine & Black.

 

 

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