European equities finished slightly lower on Friday, with investors refraining from making strong bets on stocks before Scotland's referendum and the US Federal Reserve's policy meeting next week. The FTSEurofirst 300 index of top European shares ended 0.1 percent lower at 1,382.98 points. Germany's DAX, down 0.4 percent, underperformed the market after the United States and the European Union tightened sanctions on Russia over its intervention in Ukraine.
-- Aveva tumbles after warning about currency impact
Germany imports a significant amount of gas from Russia and sold it about 36 billion euros ($47 billion) of goods last year, almost a third of the EU's total. Some 6,200 German firms are in Russia with 20 billion euros of investment. Analysts said that investors were also wary before the Fed's policy meeting next week, anticipating fresh clues on the timing of the first US rate hike in more than eight years.
Recent talk that the Fed might drop its commitment to keeping interest rates low has pushed US Treasury yields and the dollar steadily higher. "In the short term, there is potential for a pullback as investors, who have been used to cheap cash and soothing words from central bankers, may have some uncomfortable side effects," said Henk Potts, director of global research at Barclays.
"But higher interest rates will also signal that the business environment is improving, the economic backdrop is getting better and corporate profitability is growing. In the longer term, we expect stocks to move higher." Investors were also jittery after recent polls showing an independence referendum in Scotland next week on a knife edge. The ICM survey for the Guardian on Friday put supporters of the union on 51 percent against 49 percent for those in favour of independence, excluding people who said they did not know how they would vote. A YouGov poll for The Times and Sun showed Scottish support for the union at 52 percent.
"There's a lot of hesitation at this point. People are reluctant to take any new positions ahead of the Scotland referendum, but also ahead of the Fed's meeting next week which could turn out to be a real game changer," Saxo Bank sales trader Andrea Tueni said. "A 'Yes' vote can trigger considerable financial turbulence in the UK. Uncertainty over the currency arrangements Scotland would adopt and its extremely large financial sector would create a disequilibrium that financial markets would seek to balance through capital flows and distress," Credit Suisse said.
Hundreds of thousands of Catalans packed the streets of Barcelona on Thursday to demand the right to vote on a potential split from Spain. Shares in Aveva Group, whose software is used to design ships and nuclear power stations, tumbled 25 percent after the group said it would take a 14 million pound hit from currency movements. Novo Nordisk rose 2.7 percent after the US Food and Drug Administration concluded Novo's drug liraglutide was safe and effective enough to warrant approval for use in chronically obese patients.