London - Britain's top share index fell on Tuesday, with financial stocks underperforming as investors showed reluctance to buy up new positions due to uncertainty before Scotland's independence vote on Thursday.
The blue-chip FTSE 100 index was down by 0.5 percent, or 32.25 points, at 6,771.96 points by the middle of the trading day, with a fall in financial stocks taking the most points off the index.
Online fashion retailer ASOS also slumped by 10.2 percent, after the company was hit by a 2014-2015 profit downgrade.
Traders said caution over the US Federal Reserve's two-day policy meeting, which starts on Tuesday, was also set to peg back stock markets, with investors seeking clues on the likely timing of the first US rate hike in more than eight years.
“I'm a seller of rallies at the moment. We're seeing a downward bias on the FTSE at the moment,” said Beaufort Securities sales trader Basil Petrides.
Financial stocks have been the most sensitive UK equity sector in the build-up to the Scotland vote on September 18, due to uncertainty over the regulations and currency that a new, independent Scotland could adopt.
Investors have been particularly focused on the potential impact on companies with headquarters or strong ties to Scotland, such as Royal Bank of Scotland, insurer Standard Life and Aberdeen Asset Management.
David Madden, market analyst at IG, said that even though many traders still felt the “No” campaign against Scottish independence would prevail, investors were content to play it safe and reduce their exposure to such stocks for now.
“Financial stocks have been hit hardest, and even though the polls are showing a 'No' vote, it is likely nobody wants to stick their neck out and buy banks and insurers ahead of the Scottish referendum on Thursday,” said Madden.
The FTSE 100 has erased its gains made earlier in 2014 and has fallen by around 2 percent over the last two weeks. - Reuters