London Report: Flat FTSE pulled back by Scots vote and ARM

BRITAIN’s top equity index made little progress yesterday as a fall in the shares of chipmaker ARM and uncertainty over Scotland’s independence vote next week pegged back the market.

The blue-chip FTSE 100 index, which had fallen in the last three sessions, closed up by 1.11 points – flat in percentage terms – at 6,830.11 points.

A 2.4 per cent fall in ARM was one of the biggest drags on the FTSE 100, after investors gave a cautious welcome to a new launch of products from technology company Apple, which is one of ARM’s main customers.

The FTSE has lost ground since the start of the week following polls showing a rise in support for the “Yes” campaign that wants Scotland to break away from the UK. Scotland will vote in a referendum on September 18.

The FTSE’s meagre 1.1 per cent gain since the start of 2014 has underperformed slightly bigger gains of 3.4 per cent on France’s CAC and 1.4 per cent on Germany’s DAX.

Analysts said jitters about next week's Scottish referendum, which recent polls suggest is now too close to call, continued to dampen investor sentiment.

“A lot of people are worried about it. I’d be surprised if the Scottish ‘Yes’ vote goes through but I'd rather stay out of the market then get caught out by a surprise result,” said MB Capital trading director Marcus Bullus, who added he was buying US stocks and gold instead of the FTSE.

Terry Torrison, managing director at Monaco-based McLaren Securities, backed Bullus’ view that the Scots would choose to vote in favour of staying in the UK next week.

Yet many felt it was now too risky to buy the FTSE.

“I would not buy the FTSE right now. The scenario is still not clear, but I might buy it in the 6,700-6,800 point range,” said ActivTrades’ senior market analyst Carlo Alberto de Casa.

Around Europe, Italy’s MIB 0.1 per cent. Spain's IBEX was down 0.6 per cent, hurt by a drop in the shares of Santander.

The Spanish bank was down 1.3 per cent as the death of its chairman prompted worries over succession. Emilio Botin, who transformed Santander from a small domestic lender into the euro zone's biggest bank, died of a heart attack on Tuesday night.