World stock markets modestly higher after Fed as Scotland votes on independence

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SEOUL, South Korea—World stocks were mostly higher Thursday as Scotland voted in an independence referendum that could shake the U.K. economy and markets. Sentiment was underpinned by the Federal Reserve’s signal it is not rushing to raise interest rates.

Keeping score

Britain’s FTSE 100 added 0.2 per cent to 6,793.59 and Germany’s DAX rose 0.8 per cent to 9.739.02. France’s CAC 40 advanced 0.6 per cent to 4,458.25. Wall Street was set for further gains after the Dow set a record-high in the previous session. S&P 500 and Dow futures were both up 0.2 per cent.

Scottish vote

Scotland opened polling stations on Thursday for a referendum on whether the country will leave its union with England, Wales and Northern Ireland and become an independent state. The first exit polls will be released after voting closes at 10 p.m. local time, or 2100 GMT. Opinion polls have suggested the “Yes’ campaign favouring independence is neck and neck with the ‘No’ campaign that wants Scotland to stay in the United Kingdom.

The quote

“A ‘yes’ vote is likely to weigh heavily on the sterling and equities. A ‘no’ vote should result in a relief rally and is likely to be positive for the sterling and equities,’’ said IG strategist Stan Shamu in a market commentary. “However, even if we get a ‘no’ vote, I feel the recovery will be capped by the fact this whole situation is likely to give rise to further structural issues in the not-too-distant future. ‘‘

Asia’s day

Asian stock markets started out weak but mostly erased losses by the end of the day. Hong Kong’s Hang Seng finished 0.9 per cent lower at 24,168.72 and South Korea’s Kospi dropped 0.7 per cent to 2,047.74. But Australia’s S&P/ASX 200 bounced back, closing at 5,415.80, up 0.2 per cent. Japan’s Nikkei 225 outperformed the region, gaining 1 per cent to 16,067.57 as the yen traded at a six-year low against the dollar. Markets in mainland China, India and Southeast Asia also rose.

Fed watch

The Fed statement kept its “considerable’’ wording in reference to how much time would elapse before it starts raising interest rates but raised its estimate of what the Fed’s benchmark interest rate should be at the end of 2015: to 1.38 per cent from 1.13 per cent decided at its June meeting. The Fed has kept its benchmark rate at a record-low level near zero since the 2008 financial crisis to support economic recovery; the super-easy monetary policy has also boosted stock markets. Most economists expect the first rate increase to happen by the middle of next year. Before the Fed’s meeting, there was speculation the Fed might signal an earlier start to rate hikes.

Sony woes

Sony Corp. dived 9 per cent in Tokyo after forecasting its annual loss would swell to $2.15 billion, citing a writedown of its mobile business amid intense competition from Chinese rivals. The once iconic Japanese company cancelled dividends for the first time in more than five decades.

Hyundai plunge

Shares of Hyundai Motor Co., South Korea’s top automaker, and its affiliate Kia Motors Corp. plunged 9 per cent and 8 per cent respectively after a Hyundai Motor-led consortium outbid Samsung Electronics Co. for land in Seoul’s Gangnam district. Seller Korea Electric Power Corp. said the Hyundai consortium offered 10.55 trillion won ($10.1 billion) for 80,000 square meters of land in the high-end district. The land, which Hyundai will use for a new headquarters, was valued before the auction at 3.3 trillion won.

Energy

Benchmark U.S. crude was down 34 cents to $94.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 46 cents to settle at $94.42 on Wednesday. The price of oil fell after the Energy Department reported a 3.7 million barrel increase in U.S. crude inventories last week. Most analysts had expected a decline, which is typical for this time of year.

Currencies

The euro rose to $1.2892 from $1.2840 late Wednesday. The dollar fell to 108.55 yen from 108.63 yen.