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Global shares struggled on Wednesday as markets added to bets on an early US rate hike while nagging concerns over Scotland's future unnerved investors in Europe, hurting sterling and helping the dollar hold on to recent gains. European stocks flirted with their fourth daily decline in a row and benchmark US Treasury yields rose for the fifth straight session, something not seen since early June.
Shares in the euro zone's biggest bank Santander fell as much as two per cent, lagging the euro zone and pan-European financials indices , after the sudden death of its 79-year old chairman Emilio Botin. Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.3 per cent, its largest fall in nearly six months.
At mid-session the FTSEurofirst index of leading European shares was down 0.1 per cent at 1384 points. Germany's DAX was down 0.1 per cent, France's CAC 40 was flat and Britain's FTSE 100 up 0.1 per cent.
The shift towards pricing in an earlier US rate hike helped the dollar hold onto its recent gains.
The dollar hit a six-year high against the yen of 106.79 yen and the dollar index, a basket of its value against six major currencies, hovered near Tuesday's 14-month high.
But with latest official polls suggesting the outcome of the Scottish independence referendum is now too close to call, the "risk premium" surrounding the possibility the 300 year-old United Kingdom could cease to exist next week continues to hang over British financial assets.
The brief sterling dip followed an unverified web poll by an independent blogger that showed the pro-independence camp leading with 53.9 per cent.
Prime Minister David Cameron and the leaders of the other two main political parties travelled to Scotland on Wednesday to try and save the union.
"What you've got is the spectacle of the three main political leaders rushing up to Scotland like a spurned boyfriend trying to placate an aggrieved girlfriend with offers to stay, plucking promises out of thin air," said Michael Hewson, chief strategist at CMC Markets.
On Tuesday, Bank of England governor Mark Carney said Scotland could not be fully independent and have a currency union with the rest of the UK, warning that currency union is "incompatible with sovereignty".
Gold recovered from Tuesday's three-month low of $1,247.15 per ounce to stand at $1,254.10.
For a wrap-up of the news and events driving markets on Wednesday, click on Reuters TV link: reut.rs/1p69LWp
