European stocks slide before Crimea referendum

European equities dipped Friday as investors fretted over this weekend's referendum in Crimea over the peninsula's bid to break away from Ukraine and join Russia. The downbeat performance capped a weak of losses as markets were spooked also by mounting worries over an economic slowdown in China. In late morning deals, London's FTSE 100 fell 0.23 percent to 6,538.86 points, Frankfurt's DAX 30 shed 0.50 percent to 8,972.97 points and the Paris CAC 40 dipped 0.83 percent at 4,215.42 compared with Thursday's close. Traders scurried into lower-risk assets such as gold and the yen due to growing economic uncertainty and geopolitical fears. Haven investment gold hit a six-month high overnight at $1,376.64 per ounce. "With investors preferring to wait for the outcome of the Ukraine referendum we are not seeing a great deal of activity," said Mike McCudden, head of derivatives at stockbroker Interactive Investor. "As the Russian Bear casts its shadow over markets and plays chess with investors it is no wonder they have been heading to safe havens." The United States and Russia on Friday launched a round of 11th-hour diplomacy two days before Crimea votes to secede from Ukraine in a referendum that has sparked the biggest East-West showdown since the Cold War. US Secretary of State John Kerry met his Russian counterpart Sergei Lavrov in London a day after bloodshed returned to the streets of Ukraine with the stabbing death of a man in clashes between pro-Moscow and pro-Kiev supporters in the eastern city of Donetsk. Asian equities also sank further on Friday, after a heavy sell-off in New York and Europe in reaction to another batch of poor Chinese data and flaring Ukraine tensions. - Sanctions fears hit markets - Stocks had slumped Thursday on talk of Europe and the US implementing tough sanctions against Russia. "We seem to be bouncing focus between Ukraine and China at the moment and it?s Ukraine taking centre stage today with the pressure mounting over the last 24 hours," said CMC Markets analyst Toby Morris. "Escalations were kick started by a fresh batch of Russian military drills on the Ukraine border which has shortened the odds of some form of conflict, albeit still an outside bet." Ukraine remains a tinderbox as more than 8,000 Russian troops staged drills near its eastern border while NATO and US reconnaissance craft and fighters patrolled the skies of the ex-Soviet state's EU neighbours to the west. In Moscow, stocks plunged to a four-year low on Friday as jittery investors dumped their holdings ahead of the referendum. The capital's two main indices MICEX and RTS opened down, but losses accelerated to more than 5.0 percent by midday before recovering to declines of 2.45 percent and RTS 2.85 percent, respectively. "The outcome of this weekend?s referendum on Crimea?s future will ... be critical," said ING economist James Knightley. "The probable series of US and EU sanctions and counter-sanctions in the event of a full Crimean breakaway would weaken global growth and badly sap risk sentiment." Meanwhile, in foreign exchange deals on Friday, the European single currency edged up to $1.3887 from $1.3867 late on Thursday in New York. The dollar dipped to 101.56 yen from 101.78 yen.