Scotland vote fears slam pound; stocks falter

NEW YORK (Reuters) - The threat of Scotland splitting from Britain knocked the pound to a 10-month low against the dollar on Monday and sparked caution across equity markets already uncertain about whether a ceasefire in Ukraine would hold.

An opinion poll showed for the first time this year that Scots may vote for independence next week in a referendum that could herald the break-up of the United Kingdom.

The pound slumped and Britain's top shares dropped further from a recent 14-1/2 year high as companies with strong business ties to Scotland fell across the board.

The pound is one of several hotly debated issues. An independence leader said Scotland would share the currency, but Westminster has ruled this out, leading to uncertainty about valuations, debt and the sharing of North Sea oil revenues.

"If Scotland decides to go down the road of a new currency, what effect does that have on (these companies') Scottish assets and the valuations of their Scottish assets? We don't know," said Michael Hewson, chief market analyst at CMC Markets.

With little news to guide trading, stocks on Wall Street fell. But analysts said the market trend is higher with the outlook for the Federal Reserve begin to raise interest rates only well into 2015.

"The path of least resistance continues to be higher. That will most likely continue for the foreseeable future, especially as everybody understands while rates will go up at some point, the move from the Fed will be very gradual," said Ran Larwon, head of U.S. equity trading at RBC Global Asset Management in Chicago.

MSCI's all-country world index fell 0.3 percent to 431.11, while the FTSEurofirst 300 index of top European shares was down 0.45 percent at 1,389.78.

On Wall Street, the Dow Jones industrial average was down 5.28 points, or 0.03 percent, at 17,132.08. The Standard & Poor's 500 Index was down 3.16 points, or 0.16 percent, at 2,004.55. The Nasdaq Composite Index was up 9.00 points, or 0.20 percent, at 4,591.90.

Sterling sank more than 1 percent, the most in 13 months, to trade at $1.6146 against the dollar.

The dollar was slightly lower against the euro and gained against a basket of six major currencies , up 0.34 percent on the day.

U.S. Treasuries yields fell on doubts over the strength of a ceasefire between Ukrainian forces and pro-Russian separatists, and renewed concerns over U.S. economic growth following last week's disappointing jobs report.

Benchmark 10-year U.S. Treasury notes were last up 4/32 in price to yield 2.4462 percent.

Brent crude slid below $100 a barrel for the first time in more than a year as Chinese and U.S. data pointed to slower-than-expected growth in the world's top oil consumers.

Brent fell to a low of $99.36 a barrel, down $1.46 and its lowest since May 1, 2013. It last traded down 99 cents to $99.91. U.S. crude tumbled $1.00 to $92.29 a barrel.

(Reporting by Herbert Lash; Additional reporting by Marc Jones in London; Editing by Dan Grebler)