European stocks fall before Fed decision

Europe's main stock markets fell on Wednesday with all eyes fixed on the US Federal Reserve and the outcome of its interest rate meeting.

Greece was also firmly in the spotlight with hopes of a deal over its bailout repayments fading fast.

London's benchmark FTSE 100 index of top companies dropped 0.48 percent to stand at 6,677.84 points in midday deals.

The CAC 40 in Paris lost 0.69 percent to 4,806.42 points and Frankfurt's DAX 30 slipped 0.21 percent to 11,021.09 compared with Tuesday's closing levels.

In foreign exchange activity, the European single currency edged upwards to $1.1257 from $1.1251 late on Tuesday in New York.
"While overall focus is likely to remain firmly on Greece for the next few days attention will probably temporarily shift to the US," said Markus Huber, senior analyst at broker Peregrine & Black.

"After a slow start to the year with the US economy having posted negative growth in the first quarter, nobody expects the Fed to undertake any change in interest rates today."

With the release of some disappointing US data and the Greek crisis dragging on, analysts said dealers are hoping the Fed puts off a rate hike, which is expected by the end of the year.

Analysts said the crisis would likely be in focus when the Fed concludes its meeting later Wednesday, with its head Janet Yellen due to hold a news conference soon afterwards.
Dealers are hoping for some clearer guidance on its plans for raising interest rates, with fears a hike too soon could hit the global economy.

The Bank of England on Wednesday said its policymakers have stressed that interest rate developments in Britain "would depend on UK inflation prospects and would not be determined by the actions of other central banks."

The comments were taken from minutes of the BoE's last monetary policy meeting earlier this month that saw the central bank leave its main interest rate at 0.50 percent.

Meanwhile, the Greek central bank on Wednesday warned that the country could crash out of the eurozone and even the European Union if it fails to reach a bailout deal with international creditors.
Negotiations over the release of the last 7.2 billion euros ($8.1 billion) in rescue funds from Greece's massive bailout from the International Monetary Fund, European Union and European Central Bank have deadlocked as payment deadlines loom.

Greece faces a 1.6 billion euro payment to the IMF at the end of the month, with another 6.7 billion euros due to the ECB in July and August -- payments which Greek officials have said the government cannot afford.