European stocks fell on Tuesday, with a regional index hitting a two-week low, as this week's referendum on independence in Scotland and the Federal Reserve's policy meeting kept investors on edge.
France's CAC 40 lost 0.4 percent, retreating before a confidence vote in the French parliament later on Tuesday. The government finally conceded last week that near-zero growth would prevent it from bringing its public deficit below three percent of output next year.
The worries surrounding France, Scotland and the outlook for the Fed's rates overshadowed brisk mergers and acquisition activity in Europe in the past few days.
Bucking the negative trend on Tuesday, Jazztel rose 6.1 percent on the day after a 13 percent rally on Monday. France's Orange has announced a deal to buy the Spanish fixed-line telecommunications operator.
The FTSEurofirst 300 index of top European shares ended 0.2 percent lower at 1,379.12 points, after slipping to a two-week low earlier in the session.
"Generally, there's been some turbulence every time the Fed has moved from accommodation to tightening," said Jim Paulsen, chief investment strategist at Wells Fargo Asset Management, which has $490 billion under management.
"To think that in the mother of all monetary easing cycles, which is what we're going through, we're going to turn the monetary boat without any turbulence is unrealistic. But this will bring a lot of buying opportunities for the long term."
The Fed will begin its two-day policy meeting later on Tuesday, and investors will be watching for clues on the timing of the first rate hike in more than eight years. The Fed will also release economic and interest rate projections, extending their forecast horizon through 2017.
Recent talk that the Fed might turn hawkish, possibly by dropping its commitment to keeping interest rates low, has pushed up U.S. Treasury yields.
UK stocks remained under pressure, with the FTSE 100 down 0.2 percent, as investors trimmed their exposure to UK equities before Scotland votes on independence on Thursday.
Shares in Standard Life lost 0.7 percent and Aberdeen Asset Management fell 0.4 percent.
According to a closely watched survey by Bank of America Merrill Lynch, uncertainty surrounding the outcome of the referendum has sent investors in British assets heading for the exits.
BofA-Merrill, which polled 202 fund managers controlling assets of $556 billion between Sept 5-11, said the UK was among investors' least-loved market in September.
The FTSE 100 index has already underperformed so far this year, up a meagre 0.6 percent in 2014, falling behind a 4.7 percent rise in the FTSEurofirst 300 index of top European shares over the same period.
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