Spain leads European shares higher as Scots snub independence

Fri Sep 19, 2014 8:46am BST

* FTSEurofirst 300 up 0.9 pct, touches best level since 2008

* Spanish IBEX outperforms after Scotland "No" vote

* Banks also buoyed by Scottish vote result

By Sudip Kar-Gupta

LONDON, Sept 19 (Reuters) - European shares surged on Friday after Scotland's decision to vote "No" to independence from the United Kingdom buoyed equity markets and eased concerns about similar separatist movements in Spain.

The pan-European FTSEurofirst 300 index rose 0.9 percent to hit a new peak for 2014 of 1,410.93 points - and marking its highest level since early 2008.

The euro zone's blue-chip Euro STOXX 50 index rose 0.7 percent, while Germany's DAX and France's CAC both advanced by 0.6 percent.

Spain's IBEX outperformed with a 1.3 percent rise, helped by a fall in Spanish 10-year government bond yields as markets viewed Scotland's "No" vote in its independence referendum as having reduced prospects of a stronger push for a breakaway in Catalonia.

The European stock markets tracked gains on Britain's FTSE 100, which rallied after Scotland spurned independence in a historic referendum that threatened to rip the United Kingdom apart, sow financial turmoil and diminish Britain's remaining global clout.

The Scottish "Yes" campaign, which had backed independence, had gained ground over the last two weeks but had been continuously hindered by concerns over what currency an independent Scotland would use.

"For the markets in general, the Scottish result is probably the best outcome because the 'Yes' vote winning was really not priced in and that could have caused chaos, with contagion to Europe," said Clairinvest fund manager Ion-Marc Valahu.

BANKING SHARES RISE

The STOXX Europe 600 Banking Index rose 0.9 percent, helped by gains in UK lenders Royal Bank of Scotland and Lloyds - which owns Bank of Scotland - on relief following the Scottish vote.

RBS and Lloyds had fallen in the build-up to the Scottish vote, due to concerns that any decision to vote in favour of independence could make investors uncertain about the future regulatory framework for such banks.

"There's a bit of a relief rally on the banks," said Toby Campbell-Gray, head of trading at Tavira Securities.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up (Editing by Pravin Char)

 
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