Asian shares up, Scottish vote seen lifting Europe

Saturday, 20 September 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The British pound rose sharply after the Scottish independence vote indicated Scotland would remain in the United Kingdom, while Wall Street’s overnight gains and Alibaba Group’s red-hot initial public offering underpinned Asian shares. The cheer was expected to spread to European bourses, where financial spreadbetters predicted Britain’s FTSE 100 would open up by 78-79 points, or 1.2%; Germany’s DAX was seen opening 70-72 points, or 0.7% higher; and France’s CAC 40 was expected to rise by 13-14 points, or 0.3%.

“The old market adage of ‘buy the rumour sell the fact’ may still hold because if you’re leaving it to this morning to buy on post referendum euphoria you may be getting in at the top,” Capital Spreads dealer Jonathan Sudaria said in a note to clients. Though the nationalists won Scotland’s biggest city, Glasgow, they failed to meet expectations in other constituencies as the country spurned independence in its historic referendum. Sterling was last up 0.4% at $1.6460 after rising as high as $1.6525, a marked turnaround from a 10-month low of $1.6051 touched just last week. The move helped push the dollar to a six-year high against the yen in cross trading, market participants said. “This indirectly lifted the dollar against the yen, as sterling rose against the yen,” said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo. Sterling rose more than two full yen against the Japanese currency to buy 180.66 yen, its highest since late 2008. It was last up 0.9% at 179.70 yen. MSCI’s broadest index of Asia-Pacific shares outside Japan added about 0.2%, supported by Wall Street’s strong showing overnight, with both the benchmark S&P 500 and the Dow Jones industrial average setting intraday record highs. But the Asian index was still on track for a weekly loss of about 1.4%.

Relief for Europe as Scotland stays put

LONDON (Reuters): British markets rallied and the rest of Europe followed suit on Friday as Scotland’s decision to stay in the United Kingdom eased investors past the latest in a recent run of global political obstacles. With almost all the votes in, the camp for Scotland to remain in the UK was ahead 55% to 45%, an outcome likely to bring relief to a number of countries in Europe, particularly Spain, which is facing similar secessionist pressures in Catalonia. Sterling jumped to a two-week high against the dollar, a two-year peak against the euro, London’s FTSE share index hit a two-week high and Spanish stocks and bonds as well as those in Ireland jumped. Global stocks were already heading towards their fifth weekly gain in the last six. They have been boosted by further assurances this week that interest rates are likely to remain at record lows in many major economies. Sentiment was also underpinned by news that Chinese internet giant Alibaba priced its IPO at $68 a share on Thursday, the top end of the expected range that raises $21.8 billion in one of the world’s largest-ever stock offerings.