AFP

London

European stock markets slumped yesterday as investors took profits while the sterling remained cowed over the uncertainty posed by Scotland’s independence referendum.

London’s FTSE 100 index of top companies closed down 0.08% to 6,829 points.

Frankfurt’s DAX 30 was down 0.49% to 9,710.70 points, and in Paris the CAC 40 slipped 0.50% to 4,452.37 points.

The British pound sank to a 10-month low of $1.6065 in Asian trading hours. In later European deals, it recovered slightly to $1.6094, which compared with $1.6104 on Monday.

But it also lost ground against the euro which traded at 80.23 pence from 80.07 late on Monday.

“The poor old pound is still under pressure as traders are not brave enough to go bargain-hunting just yet. The possibility of Great Britain breaking up has hit the pound the hardest,” said David Madden, analyst at IG trading group early in the day.

A survey over the weekend showed that the pro-separation camp was ahead for the first time, forcing leaders of Britain’s three main political parties to announce last minute trips to Scotland to boost support against independence.

Sterling got only a slight boost from the governor of the Bank of England, Mark Carney, who hinted that the bank could begin to raise its key interest rates sometime early next year.

Traders reacted also to official data showing that Britain’s trade deficit worsened in July from the previous month, but that the country’s industrial output rebounded from June.

In New York, stock trading opened on the back foot, while waiting for an announcement by Apple.

The Dow Jones Industrial Average was down 0.36% to 17,050.49 points by midday on Wall Street, and the tech-rich Nasdaq shed 0.20% to 4,087.09.

The broad-based S&P lost 0.34% to stand at 1,994.82.

The euro meanwhile remained under pressure on Tuesday after the European Central Bank last week announced a fresh rate cut and monetary easing measures.

However, the Swiss franc steadied against the euro, at 1.2068 francs to the euro, and at 0.9345 to the dollar, having initially fallen to 0.9380, the lowest level for a year.

The yuan closed up at 6.1368 to the dollar from 6.1414 on Monday.

The price of gold fell to $1,255.75 an ounce from $1,259 late on Monday on the London Bullion Market.

Brent crude oil remained below $100 a barrel, a day after falling under the key level for the first time for more than 14 months against a backdrop of solid supplies and sluggish demand growth.