Bayer logo is pictured at its healthcare subgroup production plant in Wuppertal, Germany. The German chemicals and pharmaceuticals giant’s share price surged 6.17% at €112.70 yesterday.
AFP/London
Europe’s stock markets rose yesterday, boosted by hopes the US central bank will keep its monetary policy loose and expectations that Scotland will vote to stay part of the United Kingdom.
London’s benchmark FTSE 100 index added 0.57% to 6,819.29 points and the British pound surged as investors awaited the results of Scotland’s historic independence vote.
Frankfurt’s DAX index jumped 1.41% to 9,798.13 points, led by a surge in its second-largest company Bayer, while in Paris, the CAC 40 rose 0.75% to close the day at 4,464.70 points.
“Last night’s absence of any real surprises from the US Federal reserve... has helped push US equities out to fresh highs,” said Tony Cross, a market analyst at Trustnet Direct.
“More critical for the domestic agenda is the fact that markets appear increasingly convinced that the Scottish referendum won’t result in a break-up of the UK,” he added.
Wall Street hit a fresh record on Wednesday and Asian stocks rose overnight after the Federal Reserve stuck to its slow-but-steady plans to tighten monetary policy. The Fed said Wednesday it would stick to its steady-as-she-goes policy, keeping borrowing costs at a record low despite growing calls for a rise as the economy strengthens.
The broad-based S&P 500 rose 0.41% to 2,009.76 points, while the tech-rich Nasdaq Composite Index gained 0.54% to 4,586.78 points.
Meanwhile, the British pound reached a two-year high against the euro as markets bet that Scotland will vote in favour of remaining part of the United Kingdom.
In London stocks, Scottish-based businesses RBS, Lloyds, Standard Life and Aberdeen Asset Management were among the days’ top risers.
Scots were voting in an independence referendum which could break up the centuries-old United Kingdom. Results are expected early today.
Some 97% of eligible Scots—nearly 4.3mn people—have registered to vote, underscoring the passions that the historic decision has ignited.
After months when it looked like the independence camp could not win, a surge in support for the ‘Yes’ camp has left pollsters warning it is too close to call.
But Fawad Razaqzada, a technical analyst Forex.com, said the pound’s surge “clearly suggests investors are convinced that the Scots will vote to stay in the union”.
Sterling reached 78.53 pence against the euro, the highest level since August 20, 2012 and a two-week high against the dollar, at $1.6409.
In European corporate news, German chemicals and pharmaceuticals giant Bayer got a shot in the arm after announcing it would float its chemicals Material Science division.
The news sent Bayer’s share price surging to close the day up 6.17% to €112.70.
Shares in British no-frills airline easyJet rose 0.45% to 1,344 pence in London, after the company finalised a $2bn deal for 27 A320 aircraft from European planemaker Airbus.
Airbus shares, meanwhile, rallied 1.54% to €49.55 in Paris.
European markets held onto gains after news of a weak take-up of the European Central Bank’s new programme to pump liquidity into the eurozone economy.
The Frankfurt-based central bank said it had leant €82.6bn ($106.3bn) to 255 banks, below analysts’ forecasts for €100bn.
On the London Bullion Market, gold fell to $1,220.56 from $1,236 on Wednesday evening.
