(MENAFN- AFP) European stock markets dropped on Tuesday as investors looked ahead to a policy meeting of the US Federal Reserve and the looming referendum on Scottish independence.
London's benchmark FTSE 100 index slid 0.49 percent to 6,770.71 points in mid-afternoon trading in the British capital.
Frankfurt's DAX 30 fell 0.52 percent to 9,609.49 points and the CAC 40 in Paris lost 0.74 percent to stand at 4,395.86 compared with Monday's close.
Sterling and the ruble fell, and the euro firmed.
"Uncertainty surrounding the Scottish referendum and the Fed decision is really weighing on investor sentiment," said Craig Erlam, a market analyst at Alpari traders.
Investor sentiment in Europe's biggest economy, Germany, fell for the ninth month in a row in September amid jitters about the economic fallout from global crises, a survey indicated on Tuesday.
The widely watched investor confidence index calculated by the ZEW economic institute fell by 1.7 points to 6.9 points in September, it said in a statement.
On the corporate front, shares in Spanish fixed-line operator Jazztel soared after a French telecom giant Orange made a 3.4-billion-euro ($4.4-billion) bid for the firm.
Jazztel surged 5.98 percent to 12.76 euros in afternoon trading, compared to a 0.72 percent fall in Madrid's benchmark IBEX 35 index.
Shares in Publicis gained 0.87 percent to 56.88 euros in Paris after the company announced its chief executive Maurice Levy will extend his term until 2017.
- Unease over Fed -
Asian stock markets slipped on Tuesday before the Federal Reserve's meeting, and as lingering concerns over Chinese and US economic data weighed on global markets, dealers said.
The US central bank might adjust its timing for raising benchmark interest rates, as critics say its nearly six-year-old zero rate policy is feeding asset bubbles and possibly inflation.
"As long as rates remain at record lows, there is reason for US indices to be at these highs," said Erlam.
"That's why people are concerned about the Fed's stance... after rumours surfaced that the Fed is preparing to drop its commitment to keep rates low for a considerable amount of time."
Despite a weak US inflation report Wall Street opened lower as investors stayed cautious ahead of the start later Tuesday of the two-day monetary policy meeting of the Federal Open Market Committee.
Five minutes into trade, the Dow Jones Industrial Average dropped 0.19 percent to 16,999.29 points.
The broad-based S&P 500 shed 0.15 percent to 1,981.06 points, while the tech-rich Nasdaq Composite Index fell 0.28 percent to 4,506.17 points.
- British inflation slows -
In Britain, 12-month inflation dipped to 1.5 percent in August from 1.6 percent in July, official data showed, easing pressure on the Bank of England to raise its record-low interest rate of 0.5 percent.
Attention was focused on Scotland, two days before the country votes on whether to split from the rest of Britain.
Polls have showed a late surge in support for independence, putting the outcome on a knife edge, after the several months of the pro-union "No" camp holding a clear lead.
The British pound last week slumped to a 10-month low against the dollar and three-month trough compared to the euro on fears over the impact of Scottish independence.
In Tuesday trading, the pound slid to $1.6191 from $1.6234 late in New York on Monday.
The euro climbed to 79.96 pence from 79.71 pence.
The European single currency rose to $1.2948 from $1.2940 on Monday.
The ruble fell to a record level of 38.82 rubles per dollar after weakening on Monday, weakening beyond the 38 rubles to the dollar level for the first time.
And it broke through the symbolic level of 50 rubles per euro for the first time for several months.
The ruble has slumped as investors fret about the impact of ever more stringent Western sanctions on the Russian economy, which is already teetering on the verge of recession.
On the London Bullion Market, gold gained to $1,238.75 an ounce from $1,234.25.
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