European shares fell Wednesday, taking their cue from a slide in
U.S. and Asian markets.
The Stoxx Europe 600 index was 0.6% lower in early trade,
putting the benchmark on course for a fourth straight session of
losses.
Stock markets have now given up the gains they chalked up in the
wake of the European Central Bank's surprise rate cut last week. A
surge in support for Scottish independence ahead of next week's
referendum, as well as the prospect of fresh European sanctions
against Russia, have kept investors on edge.
European governments on Monday approved a new round of sanctions
against Russia, but leaders will weigh up the progress of
negotiations over the fate of war-torn Eastern Ukraine before
bringing them into force.
In currency markets, the British pound edged up from Tuesday's
10-month low to trade at $1.6138 against the dollar. Sterling has
fallen sharply in recent days as polls showed the pro- and
anti-independence camps in Scotland running neck and neck.
"Sterling has fallen a bit too fast in the near term and is due
a bounce, but there is more downside to come," said Kit Juckes, a
macro strategist at Société Générale.
All major stock indexes were lower, with Germany's DAX down
0.6%, and France's CAC 40 and the U.K.'s FTSE 100 both losing
0.3%.
Spain was Europe's worst performer, with Madrid's IBEX 35 losing
1.1%. The index was dragged down by Banco Santander, which fell
after announcing that longtime Chairman Emilio Botín died
overnight.
Also weighing on Spanish assets were continued worries that the
increase in support for Scottish independence could spur on
separatists in the Catalonia region, which has planned its own
breakaway referendum in November.
Spanish government bonds, which weakened on Tuesday, continued
to fall. Spain's 10-year bond yield climbed slightly to 2.24%, the
highest since before last week's ECB meeting, which boosted Spanish
debt.
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