London stocks steady on eve of election

London's stock market steadied and eurozone share prices recovered on Wednesday as investors balanced Britain's upcoming general election against events across the eurozone.

London's benchmark FTSE 100 index edged up 0.01 percent to 6,929 points on the eve of Britain's most unpredictable election in living memory, with fears of weeks of brinksmanship as the two major parties struggle to cobble together workable coalitions.

In afternoon eurozone trading, Frankfurt's DAX 30 index was up 0.77 percent at 11,414 points and the CAC 40 in Paris gained 0.50 percent to 4,998.80 compared with Tuesday's close.

"UK and European markets are trying to pare back some of the losses from yesterday, but investors are struggling to find many reasons to invest," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.

"The uncertainty surrounding the UK election combined with escalating fears that Greece will be unable to break the current impasse with its creditors is creating a negative backdrop, which threatens to remain a drag on markets."
Greece made a 200 million euro ($225 million) interest payment to the International Monetary Fund Wednesday, the Greek finance ministry said, the first of two reimbursements Athens must honour by mid-May.

Eurozone stock markets had tumbled Tuesday on fears of an early end to the European Central Bank's QE stimulus programme and a spike in tensions over the Greek crisis.

Asian stocks lost steam on Wednesday, with most leading markets in retreat after US indices had slumped on worries about surging oil prices and growing tensions over the Greek debt crisis, analysts said.

There have been growing concerns about the Greek government's ability to repay the full one billion euros it owes to the IMF in two payments this week and next, raising the spectre of a possible Greek default and catastrophic exit from the euro.

In foreign exchange trade, the European single currency advanced to $1.1235 from $1.1185 late in New York on Tuesday.

The euro rose to 73.78 British pence from 73.68 pence Tuesday, while the pound gained to $1.5226 from $1.5181.

"The strong upward momentum for the euro against the dollar remains intact with rising crude oil prices fuelling a shift in inflation expectations," said Derek Halpenny, currency analyst at Bank of Tokyo-Mitsubishi UFJ.

The ECB in March launched a 60-billion-euro per month bond buying, or quantitative easing (QE) programme to avert the risk of dangerous deflation and kick start growth in the eurozone. It is supposed to last through September 2016.

But with prices now rising again in the eurozone, and a rebound in oil prices ensuring they will likely continue to do so, investors see a possibility for the ECB to let up on the stimulus, which has weakened the euro.