Scotland Vote: Market 'Relief Rally' Forecast

The pound has strengthened and the FTSE 100 is forecast to rebound by up to 100 points following the No vote in Scotland's independence referendum.

Sterling, already pushed up on Thursday by speculation on markets that the Yes vote had fallen short of the majority needed, gained another half of one per cent - as high as $1.65.2 in Asia trading.

The pound had fallen to a low of $1.60.7 during the campaign.

Financial spreadbetters pointed to a rise of at least 1.2% when the FTSE 100 opened for business at 8am BST.

Banking stocks were predicted to see a particular lift, given the end of the uncertainty.

Royal Bank of Scotland (LSE: RBS.L - news) (RBS) had warned it would move its headquarters from Edinburgh in the event of a Yes vote - a move that would have cost it millions of pounds in the short term while Lloyds, which owns Bank of Scotland, had said it would have had to move its registered office.

An RBS spokesperson said after the result was confirmed: "The announcement we made about moving our registered head office to England was part of a contingency plan to ensure certainty and stability for our customers, staff and shareholders should there be a ‘Yes’ vote.

"That contingency plan is no longer required. Following the result it is business as usual for all our customers across the UK and RBS".

Lloyds said it remained committed to Scotland.

Market analysts had warned that a Yes vote could have taken up to 10% off sterling's value and wiped billions of pounds from share prices.

Brenda Kelly, chief market strategist at IG Index, said: "A relief rally is in the making in UK markets and key areas to watch will be the banks such as RBS and Lloyds as well as big Scottish firms like Standard Life (LSE: SL.L - news) , Aberdeen Asset Management (Other OTC: ABDNF - news) and Weir Group.

"Investors in these firms will be relieved the management in these firms will be able to devote their time to business performance."

Martin Gilbert, the founder and chief executive of Aberdeen Asset Management, responded to the vote by saying: "UK investors will welcome a reduction in the uncertainty of recent months".

The Bank of England - which had prepared contingency plans in case of a Yes vote - confirmed it would not be making a statement in reaction to the decision of the Scottish people.

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