European Markets Drop Ahead of Ukraine Vote

European stock markets traded with broad-based losses on Friday, as ongoing tensions in Ukraine and worries about slowing economic growth in China hampered the investing mood.

The Stoxx Europe 600 index dropped 0.6% to 322.73, setting it on track for a 3.2% decline for the week, which would mark the biggest weekly loss since late January.

The pan-European benchmark was weighed by a 1.5% drop for French conglomerate Bouygues SA amid developments in the company's plan to takeover Vivendi SA's (TICKER:FR:VIV) phone business. French Industry Minister Arnaud Montebourg said the board of Vivendi prefers cable operator Altice SA's bid to buy a controlling stake in its SFR phone unit, rather than the offer from rival Bouygues. Vivendi shares dropped 0.8%.

The losses dragged the French CAC 40 index down by 0.8% to 4,216.29, indicating the benchmark will close at its lowest level since early February.

Meanwhile, Germany's DAX 30 index gave up 0.9% to 4,711.18 and the U.K.'s FTSE 100 index fell 0.4% to 6,527.13.

The broader losses came as investors shunned riskier assets such as equities ahead of Sunday's referendum in Ukraine that's likely to see citizens of the Crimea region vote to return the Black Sea peninsula to Russia. Violent clashes in the eastern Ukrainian city of Donetsk overnight between pro-Russia and pro-Ukraine activists reportedly left one person dead and several injured.

The Ukrainian government, the U.S. and the European Union contend the referendum is illegal, and a vote in favor of rejoining Russia would likely be followed by a round of U.S.- and European-led sanctions against Moscow.

But that scenario is unlikely to cause long-lasting turmoil as it's already priced into the markets, most analysts said. In Friday's trade, however, Russian stocks tumbled ahead of the vote with the MICEX Index down 2.8% at 1,214.90.

Meanwhile, lingering uncertainty about a slowdown in China's economy also kept investors on edge. Data out earlier in the week showing a surprisingly large drop in exports, coupled with disappointing industrial-output numbers and retail sales out on Thursday has triggered a wave of fresh concerns the world's second-largest economy is heading for a hard landing.

Copper prices have been hit particularly hard by the concerns, although prices rebounded slightly on Friday.