LONDON (Alliance News) - UK markets Monday failed to recover from the effects of the weekend poll showing the "Yes" voters for Scottish independence ahead of the "Better Together" campaign.
The FTSE 250 led the way down, falling 1% to 15,768.25, the FTSE 100 ended down 0.3% at 6,834.77 and the AIM All-Share closed 0.4% lower at 776.13.
European stocks, which were relatively unaffected by Scottish independence poll, performed better with the CAC 40 in Paris ending down 0.2% and the DAX in Frankfurt closing up 0.1%.
At the close of European markets the US were trading broadly flat with the DJIA trading flat, the S&P 500 down 0.1% while the NASDAQ Composite trades up 0.3%.
The FTSE 100 was dragged down on the back of a weekend YouGov poll of Scottish voters, carried out last week which found that 51% of those that had made up their mind plan to vote "Yes" on September 18 for an independent Scotland, compared to 49% that plan to vote "No." The poll was the first of its kind to give the separatists a lead.
Stocks particularly exposed to Scotland were amongst the top fallers on the blue-chip index with Lloyds Banking Group down 2.4%, the Royal Bank of Scotland Group down 1.3% and Aberdeen Asset Management down 1.2%.
The pound was severely effect from the uncertainty of Scottish independence as it fell from UDD1.6320 to USD1.6120 in the Asian session and continued lower as traders in London arrived at their desks Monday, reaching a near-ten-month low by midday of USD1.6099.
By the close of trade in Europe, the pound was trading the dollar at USD1.6152.
"The effect on sterling was sharp and dramatic, with the pound sinking to levels last seen in November last year against the dollar. Even this morning, the downside dominates and with uncertainty weighing, it would be of no surprise to see additional losses for the pound," says IG Markets chief market strategist Brenda Kelly.
Christopher Vecchio, a currency analyst at DailyFX emphasised that Scotland's potential split from the pound could send ripples through the rest of Europe. "One potential knock-on effect of this Scottish vote, if they choose their independence, is that other European countries may become emboldened to exit their respective currency unions as well; if Scotland can leave the UK, why can't Italy leave the Euro?" he said.
Away from Scottish independence, Associated British Foods sank to the bottom of the FTSE 100 with its shares dropping 5.2% as investors expressed concern over the ongoing challenges the group faces due to weaker global sugar prices. It reported that revenue and operating profit in its sugar business are set to be substantially lower year-on-year on the back of falling European sugar prices, lower volumes from north China, and a currency translation impact on the unit's operating profit to the tune of around GBP20 million.
AB Foods said the global sugar price is continuing to sit at an "unsustainably low" level of an average of 17 cents, well below the average cost of production. The group did, however, report a solid performance from its Primark and Grocery arms.
Meanwhile, De La Rue finished atop of the FTSE 250 after the company was chosen by the Bank of England as its preferred bidder in the tender for its banknote printing contract. In a statement, the Bank of England said it expects to sign the contract in October, subject to completion of assurance activities in relation to De La Rue's bid, finalisation of the contract, and the final award decision by the Court of the Bank of England. Shares in the company gained 3.7%.
The UK dominates the economic calendar on Tuesday with a host of data being released from the region. The highlights being manufacturing production data at 0930 BST and the National Institute of Economic and Social Research GDP estimate for August at 1500 BST. Also on Tuesday, Bank of England Governor Mark Carney will be speaking at the Trades Union Congress.
In the corporate calendar, FTSE 100-listed Whitbread will be releasing a trading statement, as will FTSE 250-listed Fenner. Dixons Carphone will also post a trading update ahead of its inauguration into the FTSE 100 on September 22.
By Neil Thakrar; neilthakrar@alliancenews.com
Copyright 2014 Alliance News Limited. All Rights Reserved.
UK dividends calendar - next 7 days
Wednesday 15 May | |
Capital Ltd | dividend payment date |
Grit Real Estate Income Group Ltd | dividend payment date |
Jardine Matheson Holdings Ltd | dividend payment date |
Just Group PLC | dividend payment date |
Rentokil Initial PLC | dividend payment date |
Thursday 16 May | |
abrdn Property Income Trust Ltd | ex-dividend payment date |
Alternative Income REIT PLC | ex-dividend payment date |
Aquila European Renewables PLC | ex-dividend payment date |
Balfour Beatty PLC | ex-dividend payment date |
BlackRock Latin American Investment Trust PLC | dividend payment date |
BP PLC | ex-dividend payment date |
Bunzl PLC | ex-dividend payment date |
Churchill China PLC | ex-dividend payment date |
EJF Investments Ltd | ex-dividend payment date |
Essentra PLC | ex-dividend payment date |
Fevertree Drinks PLC | ex-dividend payment date |
FRP Advisory Group PLC | ex-dividend payment date |
Greencoat UK Wind PLC | ex-dividend payment date |
GSK PLC | ex-dividend payment date |
Haleon PLC | dividend payment date |
Henderson Opportunities Trust PLC | ex-dividend payment date |
Income & Growth VCT PLC | ex-dividend payment date |
Irish Continental Group PLC | ex-dividend payment date |
James Halstead PLC | ex-dividend payment date |
Jarvis Securities PLC | ex-dividend payment date |
Kingfisher PLC | ex-dividend payment date |
M Winkworth PLC | dividend payment date |
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Manx Financial Group PLC | ex-dividend payment date |
Mercantile Investment Trust PLC | dividend payment date |
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Murray Income Trust PLC | ex-dividend payment date |
Ocean Wilsons Holdings Ltd | ex-dividend payment date |
Octopus Renewables Infrastructure Trust PLC | ex-dividend payment date |
PageGroup PLC | ex-dividend payment date |
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Prudential PLC | dividend payment date |
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Shell PLC | ex-dividend payment date |
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TwentyFour Select Monthly Income Fund Ltd | ex-dividend payment date |
Unilever PLC | ex-dividend payment date |
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Vector Capital PLC | ex-dividend payment date |
Witan Investment Trust PLC | ex-dividend payment date |
Friday 17 May | |
AB Dynamics PLC | dividend payment date |
Barratt Developments PLC | dividend payment date |
Breedon Group PLC | dividend payment date |
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Direct Line Insurance Group PLC | dividend payment date |
Drax Group PLC | dividend payment date |
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Morgan Advanced Materials PLC | dividend payment date |
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Seneca Growth Capital VCT PLC - Class B | dividend payment date |
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Monday 20 May | |
Airea PLC | dividend payment date |
Ascential PLC | ex-dividend payment date |
hVIVO PLC | dividend payment date |
Invesco Bond Income Plus Ltd | dividend payment date |
Jupiter Fund Management PLC | dividend payment date |
Murray International Trust PLC | dividend payment date |
Tuesday 21 May | |
Bridgepoint Group PLC | dividend payment date |
HgCapital Trust PLC | dividend payment date |
Lloyds Banking Group PLC | dividend payment date |
Old Mutual Ltd | dividend payment date |
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