THURSDAY MARKET CLOSE: City gambles on referendum result

Traders betted on the outcome of the Scottish referendum, buying into some of the stocks that had been sold off in panic last week.

Voters leave a polling place in Edinburgh. Picture: Getty

Jasper Lawler, market analyst at CMC Markets, said the City was essentially expecting a “no” vote and the reaction to a “yes” would likely be greater.

He said: “The FTSE 100 is less than 100 points from multi-year highs, if investors were truly taking precaution over the result you’d imagine it’d be a bit lower.”

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Some Scottish stocks enjoyed a pre-emptive bounce. SSE was 24p higher at 1,521p, and Royal Bank of Scotland added 2.3p at 357.2p.

The FTSE 100 Index recovered from an uncertain start to stand 38.39 points higher at 6,819.29, as markets on the Continent reacted positively to European Central Bank (ECB) moves to strengthen the region’s lenders.

Meanwhile low-cost airline EasyJet gave a boost to its share price by announcing it will increase the payout ratio for its full-year dividend from one third of profit after tax to 40 per cent when it presents annual results in November.

It also said it has reached agreement with Airbus to exercise purchase rights over 27 A320 aircraft for delivery between 2015 and 2018. Shares lifted 6p to 1,344p.

Tui Travel flew to the top of the risers’ board after a broker upgrade from Morgan Stanley, helping shares gain almost 5 per cent, at 384p.

Outside the top flight, shares in fashion chain French Connection fell sharply despite a further narrowing in losses in the retailer’s half-year results. It said it was on track to meet City forecasts for the full year but shares dived almost 14 per cent or 9.63p to 60.38p after the loss of £3.9 million came in slightly higher than some analyst predictions.