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Financials lead UK stocks higher after Scottish "No"

* FTSE 100 up 0.6 pct; volatility index drops

* Banks, asset managers up 1.2-3.4 pct on FTSE 100

* Scotland-based stocks up 1.0-3.4 pct as UK stays united

By Tricia Wright

LONDON, Sept 19 (Reuters) - UK banks and asset managers led

London equity indexes higher on Friday after Scottish voters

rejected independence, prompting a relief rally from investors

who had been concerned the United Kingdom might break up.

Lenders with strong exposure to Scotland, including Royal

Bank of Scotland and Lloyds Banking Group, were

up 2 percent to 3.4 percent. Asset managers Schroders (LSE: SDR.L - news) ,

St. James' Place and Aberdeen Asset Management (Other OTC: ABDNF - news)

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rose between 1.2 percent and 3.1 percent.

A vote for independence would have raised immediate

questions over what currency Scotland would use and its position

within the European Union.

Trading volume in RBS (LSE: RBS.L - news) was particularly strong, already at

its normal 90-day daily average after an hour's trade,

contrasting with the broader FTSE 100 on around 40 percent.

The blue-chip FTSE 100 index was up 40.00 points, or

0.6 percent, at 6,859.29 points by 0802 GMT, trading back up at

levels last seen at the start of the month.

Scotland's vote against independence ended a skittish two

weeks for the UK benchmark index, which dropped sharply when one

poll unexpectedly showed a lead for the pro-independence side.

Engineering groups Weir and Babcock were up

between 1.6 percent and 2 percent.

Shares (Frankfurt: DI6.F - news) of firms with significant exposure to Britain's North

Sea oil industry also rose, with North Sea rig operators

Petrofac and Enquest (LSE: ENQ.L - news) up 1.4 percent and 1.5

percent respectively.

A basket of top Scotland-based stocks on the broader FTSE

350 index also traded higher, with its dozen or so components up

between 1 and 3.4 percent.

"The markets were pricing in a no vote... but now that we've

got confirmation of that it's going to propel stocks on from

here," Mike McCudden, head of derivatives at Interactive

Investor (Other OTC: IVSBF - news) , said.

A 4.3 percentage point drop in the FTSE 100 Volatility Index

, which measures the price of options on UK blue-chip

stocks, suggested the relief over the vote could set the market

up for a smoother ride.

Trading could be choppy in morning trade, however, due to

"triple-witching" - when the contracts for stock index futures,

stock index options, and stock options expire on the same day.

(Editing by Lionel Laurent and John Stonestreet)