LONDON (Alliance News) - UK markets ended Tuesday fairly mixed, supported by strong production data, while the pound spiked up following comments made by Bank of England Governor Mark Carney.
The FTSE 100 ended the day down 0.1% at 6,829, while the FTSE 250 ended the day up 0.1% at 15,786.87 and AIM All-Share index also finished up 0.1% at 777.07.
European stocks performed poorly with the CAC 40 and the DAX both ending the day down 0.5%.
US markets are also trading lower at the close of European markets with the DJIA down 0.4%, the S&P 500 down 0.3% and the NASDAQ Composite trading down 0.3% as well.
UK stocks began the day fluctuating between gains and losses as investors anxiously consider an independent Scotland after another poll which suggested the "Yes" voters had gained ground. Following Sunday's YouGov poll, which showed the "Yes" vote with a slight lead, a poll from research company TNS Global Tuesday has shown that the "Yes" and "No" campaigns each have support from 41% of the voters who have already made up their minds, suggesting momentum is building in the "Yes" camp right at the crucial time, just nine days before the vote.
The risk of surging support for the Scottish "Yes" campaign has clearly rattled Westminster, as David Cameron has seen fit to cancel Wednesday's session of Prime Minister's Questions, so that all three of the main party leaders can head up to Scotland to campaign for the "Better Together" camp.
"Our message to the Scottish people will be simple: 'We want you to stay,'" said the Prime Minister's Facebook account earlier Tuesday.
The markets made a steady recovery from the news during mid-morning trade as UK industrial production growth accelerated in July, expanding 0.5% from June, when it was grew 0.3%. At the same time, manufacturing output maintained 0.3% monthly growth in July and matched economist expectations.
In addition, the National Institute of Economic and Social Research gross domestic product estimate for the three months up to August showed growth of 0.6%, up from July's reading of 0.5%.
The pound, meanwhile, jumped in reaction to Mark Carney's comments to the Trades Union Congress in Liverpool, which suggested that interest rates could rise by spring next year as economic recovery has exceeded all expectations and wage growth improves.
"With many of the conditions for the economy to normalize now met, the point at which interest rates also begin to normalize is getting closer," Carney said.
"What was more notable was the Governor?s comments that a currency union was incompatible with sovereignty, reiterating his comments from earlier this year, and a subtle reminder to SNP leader Alex Salmond that for all his claims to the contrary, sharing a currency remains fraught with difficulties," said Michael Hewson, chief market analyst at CMC Markets.
On the London Stock Exchange, the FTSE 350 oil and gas sector index fell by 0.8% as the price for Brent oil hit its lowest level in over a year on Monday. Royal Dutch Shell stocks came under the most pressure; Royal Dutch Shell 'B' shares fell 1.5% and Royal Dutch Shell 'A' shares fell 1%.
In the FTSE 250, Petra Diamonds led the way with its shares gaining 8.7%. The company said it had recovered an "exceptional" 232.08 carat white diamond at its Cullinan mine in South Africa, the third exceptional find at the mine this year. In a statement, the company said the latest big stone it has found is a D colour Type II diamond of "exceptional size and clarity." It expects to sell the stone in the second quarter of its financial year, which began July 1.
Meanwhile on AIM, Akers Biosciences' shares rose 21% after it said it has signed a sales contract for its Tri-Cholesterol "Check" product covering Australia, Singapore, the United Arab Emirates and Oman. The company said the USD864,000 contract will be handled by Dubai-based 36 Strategies General Trading LLC and will target customers from the military, medical, university and resources sectors.
It is a relatively quiet day in the economic calendar on Wednesday, with the UK inflation report hearings at 1445 BST being the highlight.
In the corporate calendar, Barratt Developments and Kingfisher Group will be reporting half-year results while Sports Direct International will be releasing an interim management report and London Stock Exchange Group will release a trading statement.
By Neil Thakrar; neilthakrar@alliancenews.com
Copyright 2014 Alliance News Limited. All Rights Reserved.
