COMPANIES with Scottish links led the FTSE 100 Index higher as a relief rally took hold on financial markets following the rejection of independence.

Shares in Royal Bank of Scotland surged 3% while energy provider SSE, Glasgow-based engineer Weir and Standard Life were up by around 2%.

The FTSE 100 Index was 45.5 points higher at 6865 - a rise of 0.5% but short of the 100-point surge predicted earlier in the morning - as the No vote removed a long period of uncertainty for investors.

Sterling climbed by almost 1% overnight to as high as 1.65 against the US dollar as traders reacted to the first poll results showing support for the No campaign. The pound gave up some of the gains later but is still much improved on the 10-month low of just above 1.60 seen two weeks ago.

Schroders' European economist Azad Zangana said: "The news will come as a relief for investors and financial markets.

"The prospect of months of messy negotiations, uncertainty over the division of national assets and debt, and the currency arrangements of an independent Scotland had been weighing on the confidence of investors over the past few weeks, especially as polls had tightened."

However, Samuel Tombs, senior UK economist at consultancy Capital Economics, said a substantial rally in asset prices was unlikely because the markets only priced in a small chance of a Scottish Yes vote.

He added: "Although sterling fell against the dollar in the weeks before the vote, this seems to have largely reflected upward revisions to expectations for US interest rates, rather than concerns the UK might fall apart.

"So, sterling seems unlikely to return to the 1.70 mark seen two months ago."

Royal Bank of Scotland and Lloyds Banking Group announced contingency plans last week in which they said they would register themselves in England if Scotland votes for independence.

RBS, which has been based in Scotland since 1727, said its plan to move its registered head office to England in the event of a Yes vote was no longer required.

It said: "Following the result, it is business as usual for all our customers across the UK and RBS."

Edinburgh-based Standard Life, which also put in place plans for new regulated companies in England, said today: "We are proud of our Scottish heritage and will continue to build our success from these roots."

It added: "We recognise that further constitutional change is very likely following the clear result of the referendum.

"We will consider the implications of any changes for our customers and other stakeholders in our business to ensure their interests are represented and protected.

"As a large company based in Scotland, Standard Life is ready to contribute to this process."

Mark Dampier, head of investment research at Hargreaves Lansdown, said it was business as usual for investors as they can continue to manage their savings, investments and pensions as they did before the referendum.

He added: "In the longer term there may be changes to investment rules and practices following further devolution but, for now, the party conferences and the forthcoming general election will be the main focus of attention."

The removal of uncertainty following the Scottish vote will heighten speculation about when the Bank of England will hike interest rates from their record low of 0.5%. Markets are currently pricing in an increase in February.

Scotiabank economist Alan Clarke said: "The reduced uncertainty is likely to see the market bring forward the timing of the first BoE rate hike again, though within reason.

"Depending on how the pound exchange rate moves in the coming days, this could lead to another downward revision to the Bank's inflation projection.

"In turn, that should prevent market expectations of a hike coming too far forward. We still expect the first move to come in February."