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LONDON (Alliance News) - Investors reined in their early optimism Thursday, causing London indices to trade mixed by mid-morning, as RBS and Lloyds announced contingency plans in the event of an independent Scotland.
The FTSE 100 is trading 0.2% lower at 6,818.48, while the FTSE 250 performing more strongly, trading up 0.3% at 15,723.51. The AIM All-Share is trading up 0.1% at 776.32.
European indices are lower after inflation results were released for both France and Germany. The CAC 40 trades down 0.4% in Paris and the DAX in Frankfurt is down 0.1%.
Germany's inflation in August, measured on the consumer price index, held steady as initially estimated, at its lowest level since February 2010, final data from Destatis showed. The consumer price index rose 0.8% year-on-year in August, the same as in July. This was the lowest since February 2010, when prices climbed 0.5%. On a monthly basis, consumer prices remained unchanged.
French inflation slowed as expected in August to the lowest since late 2009, the statistical office Insee reported. Consumer prices rose 0.4% year-on-year, in line with forecast, but slower than the 0.5% increase in July. French inflation of 0.4% was last reported in November 2009 and it was the lowest since October 2009, when prices fell 0.2%.
Royal Bank of Scotland and Lloyds Banking Group both based in Scotland, have made contingency plans to move their headquarters to London in the event of the Scottish people voting in favour of a split from the UK at next week's independence referendum.
"While the scale of potential change is currently unclear, we have contingency plans in place which include the establishment of new legal entities in England," Lloyds said in a statement.
RBS also confirmed its contingency planning, saying it believes it will be "necessary" in the event of a 'Yes' vote to re-domicile the bank's holding company and its primary rated operating entity, The Royal Bank of Scotland PLC, to England.
This comes after Standard Life on Wednesday said it could transfer parts of its business out of Scotland, potentially including pensions, investments and other long-term savings held by customers, as a precautionary measure over the uncertainty around Scotland's constitutional future.
The three financial firms are amongst the FTSE 100 winners Thursday, with Standard Life trading up 2.4%, RBS up 1.3% and Lloyds up 1.1%.
Next is one of the top fallers in the blue-chip index after it said in its interim results that it will not raise its guidance for pretax profit and will not pay out a special dividend to shareholders. After reporting a 19% rise in pretax profit to GBP324.2 million, the company has taken a cautious approach to next year's performance, because it will be facing tough comparatives and potentially higher UK interest rates. Shares in the company are down 1.6%.
Ocado Group leads the FTSE 250 with its shares gaining 4.2% after it posted a rise in sales and average orders per week for the third quarter, but said its average order size had shrunk during the period. The grocery-delivery company said group sales in the 12 weeks to August 10 were up 23% to GBP231.9 million, against GBP189.2 million a year earlier and retail sales in the period were up 16% to GBP218.5 million against GBP189.2 million last year. Average orders per week increased by 17% to 163,000, against 139,000 last year, but average order size was down by 1.7% to GBP111.64 against GBP113.54 in the corresponding period in 2013.
Looking toward the rest of Thursday, the US reports jobless claims at 1330 BST. After the close London trading, at 2000 BST, ECB President Mario Draghi will be making a keynote speech at Eurofi Financial Forum in Milan.
By Neil Thakrar; neilthakrar@alliancenews.com
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