19th Sep 2014 08:08
LONDON (Alliance News) - UK stocks are seeing a relief rally Friday as the results of Thursday's referendum over whether the Scottish public wants to break away from the rest of the UK showed a final vote in favour of maintaining the Union.
The UK's leading index gapped higher at the open and, an hour into the trading session, is holding onto those gains. The FTSE 100 is up 0.7% at 6,864.26. The more UK focused mid-cap FTSE 250 has seen an even stronger gain, up 1.3% at 15,931.98. The AIM All-Share is up 0.4% at 761.26.
The full results of the historic referendum are now in and, with a huge 84% turnout, show that the Scottish public voted 55.3% in favour of keeping the Union, while 44.7% voted for a split. That represents a bigger margin in favour of the union than the last polls in the run-up to the vote had predicted, sparking relief in the financial markets.
Those companies based in, or most exposed to, Scotland are seeing particularly strong gains. Royal Bank of Scotland is the best FTSE 100 performer, up 3.6%, with Lloyds Banking Group up 2.1%.
While the banks had said they would have moved south of the border in the event of a "Yes" vote, this would have been a costly exercise, so the fact that it is business-as-usual Friday has caused a rebound in recent weakness.
Sterling traders already had been betting on a "No" vote, sending the pound up to a two-week high against the dollar of USD1.6525, and a two-year high against the euro of EUR1.28. The pound has seen a little profit taking since the final results have been reported and currently trades at USD1.6466 and EUR1.2772.
"The reaction in GBPUSD was classic buy the rumour, sell the fact," says Forex.com research director Kathleen Brooks.
By Jon Darby; [email protected]; @jondarby100
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