Focus on Scottish referendum as FTSE drops

In mid-morning trading the FTSE 100 is down 10 points at 6820 as the Scottish question looms over the market.

London skyline
Source: Bloomberg

We are one week away from the Scottish referendum on independence and it is all traders are talking about. The Better Together campaign was given a shot in the arm after a Survation survey put the ‘No’ vote back in the lead; this has helped the Scottish financial firm claw back some of the losses that were sustained during the week. When it comes to Scottish stocks the bias remains on the downside; any resurgence in the ‘Yes’ campaign could send Edinburgh-based banks through the floor.

Sterling is treading water, as the pound has yet to fully recover from the collapse over the weekend. Even though the currency is cheap at the moment, nobody is willing to buy as we could be approaching ‘Black Thursday’.

Our binary bet on the outcome of the Scottish Referendum has seen a spike in activity; our clients think there is a 20% chance of a ‘Yes’ vote, which compares with a 30% chance pre-Survation survey.

It is one week from the Alibaba IPO which could set a record for stock market flotation, and our grey market is indicating a market capitalisation of $207 billion. 

Morrisons is paying for its price war, as first-half profits declined by 30%, but as the supermarket offers a healthy dividend institutional investors still think it’s a bargain.

Ocado delivered a 15.5% jump in third-quarter sales; 2014 could be the year the company finally posts a full-year profit. 

In the US we are expecting the Dow Jones to open down 58 points at 17,010 as traders prepare for weak jobless numbers at lunchtime. 

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.