London stocks advance on eve of election

London's stock market advanced Wednesday despite uncertainty about Britain's upcoming general election, while eurozone stocks were mixed following sharp losses the previous day on a strong euro.

London's benchmark FTSE 100 index climbed 0.38 percent to 6,954.04 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 0.20 percent at 11,350.87 points and the CAC 40 in Paris slid 0.13 percent to 4,967.62 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 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 as the euro spiked on fears of an early end to the European Central Bank's quantitive easing (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 fretting about Greece, 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 $1.1283 from $1.1185 late in New York on Tuesday.

The euro rose to 74.16 British pence from 73.68 pence Tuesday, while the pound gained to $1.5203 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 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.

- Weak US data -

The dollar has also been weakening as investors see the US Federal Reserve likely holding rates at record lows for a while longer after the US economy hit a soft patch in the first quarter of this year.

Weak US hiring figures released Wednesday led the euro to gain further ground against the dollar.

Payrolls firm ADP estimated the US added just 169,000 private sector jobs in April, the second month in a row under 200,000, as the petroleum sector downturn continued to pinch the labour market.

Before the release analyst Ipek Ozkardeskaya at London Capital Group said that a figure under 200,000 "could further damage the expectations that the Fed will start policy tightening before the end of 2015" and make for volatile trading.

US stocks opened higher Wednesday as news of a large biopharmaceutical merger offset the lacklustre data on private sector hiring.

Five minutes into trade, the Dow Jones Industrial Average climbed 0.46 percent to 18,010.74 points.

The broad-based S&P 500 gained 0.35 percent to 2,096.81, while the tech-rich Nasdaq Composite Index advanced 0.35 percent to 4,956.69.

Alexion Pharmaceuticals announced it would buy Synageva BioPharma for $8.4 billion, creating a bigger player in treatments for rare diseases.

Asian stocks lost ground Wednesday as China's market declined, with Shanghai falling 1.62 percent.

Sydney fell 2.3 percent, Seoul dropped 1.3 percent and Hong Kong shed 0.41 percent.

Tokyo was closed for a holiday.

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