European markets rally as Scots reject independence

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AFP, London :
Europe’s main stock markets and the pound jumped Friday as investors welcomed news that Scotland has voted to reject independence from the United Kingdom.
In early morning deals, London’s benchmark FTSE 100 index added 0.67 percent to 6,865.12 points, while sterling hit a two-year euro high in anticipation of victory for the “No” campaign.
In Paris, the CAC 40 index rose 0.57 percent to stand at 4,490.60 points and Frankfurt’s DAX 30 advanced 0.52 percent to 9,848.76 compared with Thursday’s closing level.
“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.
The British pound continued its fightback on Friday, with euro tumbling 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.
At the same time, sterling jumped to a two-and-a-half-week peak at $1.6525, and also hit a six-year high of 180.71 yen.
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 3.53 percent to 369.9 pence, topping the FTSE 100 leaderboard, and Lloyds gained 1.88 percent to 77.3 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.

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