Financial stocks push FTSE lower as Scottish vote nears

By Sudip Kar-Gupta LONDON (Reuters) - Britain's top share index fell on Tuesday, with financial stocks underperforming as investors showed reluctance to buy up new positions before Scotland's independence vote on Thursday. The blue-chip FTSE 100 index closed down by 0.2 percent, or 11.97 points, at 6,792.24 points, with a fall in major financial stocks weighing on the market. "With the uncertainty around the Scottish election, we're seeing a bit of a risk-off mentality, with investors prepared to sit on cash," said Dafydd Davies, partner at Charles Hanover Investments. Online fashion retailer ASOS, which is not listed on the benchmark FTSE 100 index but is part of the broader London stock market, slumped by 8.9 percent, after the company was hit by a 2014-2015 profit downgrade. Traders said caution over the U.S. Federal Reserve's two-day policy meeting starting on Tuesday would also peg back stock markets, with investors seeking clues on the likely timing of the first U.S. 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," 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 Sept. 18, due to uncertainty over the financial regulations and currency that a new, independent Scotland could adopt. Investors have been particularly focused on the potential impact on companies with headquarters in Scotland or strong ties to it, such as Royal Bank of Scotland, insurer Standard Life and Aberdeen Asset Management. David Madden, market analyst at IG, said many traders felt the "No" campaign against Scottish independence would prevail but 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. (Additional reporting by Tricia Wright; Editing by Andrew Roche)