London View

US and EU Announce Further Russia Sanctions

The FTSE is up by around 0,2% this morning, as some of Scotland’s biggest companies publicised their plans to move South in the event of a Yes vote in next week’s independence referendum. Companies such as RBS, Lloyds, Clydesdale, Aegon and TSB have announced their intention to move operations to England should Scotland vote to secede from the UK, with insurer Standard Life going as far as to say that it may move even if Scotland chooses to stay in the union, depending on the level of further devolved powers subsequently granted to Scotland. RBS and Lloyds are currently both up by around 0.35%. The latest figures are showing the Better Together Campaign moving marginally ahead in the polls. Alex Salmond, leader of the SNP, claimed that the slump in markets this week was due to the ‘reaction to the panic we saw at Westminster.’

Both the EU and US have announced a further range of sanctions against Russia, aimed in particular at the energy sector; the export of technology aimed at helping Russian oil companies such as Rosneft, Gazprom Neft and Transneft will be blocked. The Rouble reeled in the wake of the new sanctions, hitting a new record low against the Dollar of 1: 37.58, beating the previous low of 37.51 reached on September 1^st . BP’s share price is currently down by around 0.3%, with a potential development in the Urals together with Rosneft threatened by the new sanctions.

In the Asian session the Nikkei continued to rise as the Yen continued to fall against the Dollar, reaching a 1:107.20 level on Thursday, strengthening exporters further. The Japanese index closed up by 0.25% at 15,948.29, moving closer to the 16k level. Over in China, the Shanghai Composite closed up by 0.88% after the value of last month’s loans to consumers and businesses came in higher than expected. The index is currently at a level of 2,331.95.

In the US the S&P rose marginally yesterday, up by 0.09%, but the index is still on the wrong side of the 2k level. Markets will be focussed on US Retail Sales figures for August, which are due out later today.