European stocks up as Scots vote ‘No’


Sun, Sep 21, 2014 - Page 15

European stocks rose on Friday as Scotland voted to reject independence from the UK, while the regional benchmark index failed to hold on to a six-and-a-half-year high amid the expiry of derivative contracts.

Royal Bank of Scotland Group PLC and Lloyds Banking Group PLC, which had threatened to shift their domiciles out of Scotland if it separated from Britain, rose. SAP SE fell the most since January last year after the biggest maker of business-management software agreed to buy Concur Technologies Inc.

Sulzer AG lost 4.3 percent after people familiar with the plan said Siemens AG may make an offer for Dresser-Rand Group Inc. Options and futures on stocks and indexes expired on Friday in a process known as quadruple witching.

The STOXX Europe 600 Index gained 0.2 percent from Thursday to 348.52 on Friday, after earlier rallying as much as 0.9 percent. The number of shares changing hands in the gauge’s companies was more than double the 30-day average for this time, according to data compiled by Bloomberg.

The UK’s FTSE 100 Index climbed 0.3 percent.

“It’s a risk-on day,” Richard Champion, chief investment officer of Sanlam Private Investments (UK) Ltd, said by telephone in London. The Scottish referendum “is one more thing investors don’t have to worry about. A ‘yes’ vote would’ve caused uncertainty for the European and UK markets. In continental Europe, we have loose monetary policy that will be supportive for shares.”

Scotland voted to remain in the UK after an independence referendum that put the future of the 307-year-old union on a knife edge and risked years of political and financial turmoil. About 55 percent of Scottish voters supported the pro-union campaign, compared with 45 percent who backed a split.

The STOXX 600 gained 1.2 percent this week, building on gains after US Federal Reserve Chair Janet Yellen indicated US interest rates would not increase any time soon. The FTSE 100 posted a weekly increase of 0.5 percent, after falling on the first three days of the week amid the uncertainty surrounding the Scottish vote.

A measure of expected volatility in euro-area stocks, based on options prices, tumbled 9.4 percent to the lowest level since July. A similar index for FTSE 100-listed stocks plunged 31 percent, completing the biggest drop since 2000.

National benchmark indices rose in 13 of the 18 Western European markets. Germany’s DAX Index was little changed, while France’s CAC Index was slid less than 0.1 percent.