Europe midday: Stocks drift as worries about Greece rumble on; FOMC minutes eyed

LONDON (ShareCast) - European stocks were little changed on Wednesday, giving back some of the gains it racked up in the previous session, as concerns about Greece continued to play on investors' minds, ahead of the release of the latest Federal Open Market Committee minutes. By 1155 BST, the Stoxx Europe 600 index was flat, while the CAC and the DAX were down 0.2%. At the same time, the euro resumed its slide against the dollar, slipping below $1.11.

The currency had fallen sharply on Tuesday after comments from European Central Bank members. ECB governing council member Christian Noyer said the monetary authority is prepared to take further action against inflation if needed and that the quantitative easing programme had already made a positive impact on prices. The ECB's Benoit Coeure, meanwhile, said the bank would front-load asset purchases in May and June due to low market liquidity during the summer months.

Sentiment was undermined by press reports that Greece will miss its June debt payment to the International Monetary Fund unless the country receives more aid.

"Overall, we continue to believe an interim agreement will be reached before Greece's next IMF loan redemption of €0.3bn on 5 June that could, at least initially, unlock the disbursement of €1.9bn in ECB Securities Markets Programme profits to Greece," said Gizem Kara, senior European economist at BNP Paris. "But, if history is any guide, potential increase in tensions between the two sides and delays in the process cannot be ruled out." As worries about Greece rumbled on, investors sifted through a raft of corporate news.

France's Altice surged nearly 8% after it said it was buying a controlling stake in US cable company Suddenlink in a deal valued at $9.1bn.

Vodafone added nearly 4% after Liberty Global (NasdaqGS: LBTYA - news) chairman John Malone was quoted as saying that the company would be a great fit for his.

On the downside, UBS (NYSEArca: FBGX - news) slipped after the company said it will pay more than $500m in fines to US authorities for its role in the manipulation of foreign exchange trading markets and benchmark interest rates.

Lafarge (Paris: FR0000120537 - news) was in the red after it proposed to cut 380 jobs before it closes its merger with Holcim (Other OTC: HCMLY - news) .

Shares (Frankfurt: DI6.F - news) in luxury retailer Burberry slumped after the company cautioned that it was seeing increased uncertainty in some of its markets and warned over the potential impact of currency movements in the release of its full-year results.

Marks & Spencer (Other OTC: MAKSF - news) , however, reversed earlier losses to trade 1.7% higher after posting its first rise in annual profit in four years. Looking ahead, the release of minutes from the Fed's meeting at the end of April is due after the European close.

"Since removing its forward guidance earlier this year, the Fed has offered very little insight into when that first rate hike will come and that is making investors quite anxious, particularly around these kinds of releases.," said Craig Erlam, senior market analyst at Oanda.

The Fed has said that a rate hike will depend on data, but hasn't made it clear what they're looking for when they say they're waiting for further improvement, said Erlam.

"The impression I get is that the labour market is strong enough, the worry is productivity and wage growth which ultimately impacts the inflation outlook. If the Fed start to see evidence that productivity is improving then wages should improve and inflation hit its target within the forecasting period. As a result, I think a rate hike will come this year, possibly still in September," added Erlam.