Weaker European stock markets slightly outpace nervous FTSE

By Sudip Kar-Gupta

LONDON, Sept 8 (Reuters) - European shares fell on Monday and traders said uncertainty as to whether a Ukraine ceasefire would hold and concerns over Scotland's independence referendum were prompting investors to trim their equity positions.

Continental European equity markets did not decline by as much as Britain's FTSE 100, but they were nevertheless pegged back in negative territory.

Germany's DAX edged down by 0.1 percent while the euro zone's blue-chip Euro STOXX 50 index fell 0.4 percent. France's CAC also weakened by 0.3 percent, with all those indexes slightly outperforming a 1 percent slide on the FTSE 100 which was hit hardest by concerns over Scotland.

The DAX has lost ground in recent months as investors worry about the economic impact of tensions over Ukraine, including German companies' trade exposure to EU sanctions against Russia.

Darren Courtney-Cook, head of trading at Central Markets Investment Management, said he would bet on the DAX losing ground in the near term, partly due to uncertainty over whether or not a ceasefire in eastern Ukraine would hold.

"I am 'short' on the DAX, and I'm looking for a pullback," he said.

A YouGov survey for the Sunday Times newspaper put supporters of Scottish independence at 51 percent against the "no" camp at 49 percent, overturning a 22-point lead for the unionist campaign in just a month.

Shares in Scottish-based financial stocks were among the worst performers in Europe. The Scottish vote is on Sept. 18.

Analysts and economists have questioned whether an independent Scotland will be able to host large financial institutions. Banking industry sources told Reuters last week that Lloyds is considering moving its registered offices to London if Scots vote for independence.

"I think the euro zone stock markets will fall a bit if Scotland votes 'Yes' for independence, mainly because of the uncertainty that this will create," said Rupert Baker, a European equity sales executive at Mirabaud Securities.


Michel Juvet, chief investment officer at Swiss bank Bordier, said investors feared a Scottish vote for independence could reignite separatist movements elsewhere in Europe.

Juvet said a Scottish "Yes" vote could encourage the Catalan movement seeking to break away from Spain.

"The consequences in Europe could be bad," said Juvet.

However, Goldman Sachs' equity strategists kept a positive overview for European stock markets, which rallied last week after a surprise interest rate cut and other major measures by the European Central Bank to support the euro zone economy.

The Goldman Sachs' strategists saw further gains in European stocks in the coming months, and raised their rating on equities to 'overweight' from 'neutral' on a 3-month basis.

Europe bourses in 2014: http://link.reuters.com/pap87v

Asset performance in 2014: http://link.reuters.com/gap87v

Today's European research round-up (additional reporting by Blaise Robinson; Editing by Ruth Pitchford)

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