European stocks steady before key Greece meeting

Investors were also on alert over rising eurozone debt pressure on Italy and ahead of the Federal Reserve\'s latest monetary policy announcements, a day before the G20 meets to discuss Europe\'s raging crisis.

German Chancellor Angela Merkel and French President Nicolas Sarkozy have summoned Greek Prime Minister George Papandreou for talks on Wednesday after his referendum plan raised the spectre of Greece\'s exit from the euro.

Markets were firmer on Wednesday as traders hoped for "a positive outcome from the meeting," Spreadex trader Simon Furlong told AFP.

"It should not be mistaken for any serious correction, there has been no positive news out as of yet."

In midday trade, London\'s benchmark FTSE 100 index dropped 0.29 percent to 5,405.79 points, while Frankfurt\'s DAX 30 added 0.87 percent to 5,886.91 points and in Paris the CAC 40 gained 0.77 percent to 3,092.87.

Milan\'s FTSE Mib index rose 0.92 percent to 15,065.20 points, one day after tumbling 6.8 percent on mounting concern that Italy was being dragged into the debt crisis.

Athens stocks fell 0.86 percent in Wednesday trade, extending the previous day\'s 6.92-percent slump.

In foreign exchange deals Wednesday, the euro rose to $1.3769 from $1.3697 late in New York on Tuesday. The dollar slid to 78.04 yen, from 78.34.

On Tuesday, the European single currency had tumbled to $1.3609 -- the lowest level since October 12 and well below the $1.42-level reached last week when markets had welcomed the eurozone debt rescue plan unveiled in Brussels.

Papandreou unexpectedly announced on Monday a confidence vote and a national referendum on last Thursday\'s European Union debt deal, taking a political gamble in an attempt to silence opposition to his policies.

The Greek premier was also battling for his political life after narrowly securing cabinet backing for the controversial referendum, ahead of a confidence vote in parliament later this week.

Analysts fear that the potential departure of Greece from the eurozone club could spell the end of the euro project and spark a fresh economic downturn.

"Investors remain extremely wary," said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers in London.

"The future of Europe, and with it, potentially the health of the global economy, continue to hang in the balance."

In Italy, 10-year government bonds were still trading above 6.0 percent -- a level seen by analysts as a threshold that could imperil the nation\'s chances of financing itself.

The rate had reached a near-record high of 6.33 percent on Tuesday, but stood at 6.145 percent on Wednesday.

Shell-shocked investors are concerned that the raging fires of the eurozone debt crisis, which has already resulted in gigantic EU/IMF bailouts for Greece, Ireland and Portugal, could now engulf Italy and possibly Spain.

Papandreou\'s surprise referendum call and the possibility that the country\'s voters would reject the EU bailout plan also sent US tumbling on Tuesday.

In Asia on Wednesday, Tokyo stocks closed down 2.21 percent and Seoul shed 0.61 percent. However, Hong Kong rose 1.88 percent and Shanghai gained 1.38 percent.

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