UK stocks hit record high; eurozone markets slide

The British stock market rallied Thursday to a record peak, propelled by optimism over the government's budget, but European stocks later slipped as investors awaited an EU summit for fresh news on the Greek debt crisis.

London's benchmark FTSE 100 index soared to a record-high of 6,982.79 points, building on gains won the previous day after the British government's upbeat budget. The FTSE in afternoon deals stood at 6,940.42 points, down 0.07 percent from Wednesday.

The CAC 40 index in Paris slid 0.21 percent to 5,022.61 points, while Frankfurt's DAX 30 index lost 0.60 percent to 11,851,40 points.

"After loitering in the shadows of its more impressive US and eurozone peers of late, the FTSE had its moment to shine this morning following the double-whammy hit of (the) positive UK Budget and US Fed statements," said Spreadex analyst Connor Campbell.

But as the UK index slipped away from the new record, Campbell said it suggested "these levels may not currently be sustainable."

The US Federal Reserve, after a closely watched two-day meeting, issued a statement Wednesday that had removed a pledge to remain "patient" on raising rates, signalling a possible mid-year rate increase.

At the same time, however, Fed chief Janet Yellen stressed that while jobs were picking up the economy was more muted than three months ago. She added that consumer spending has slipped, inflation slowed, wages were flat, and the stronger dollar has hurt US exports.

In reaction, the European single currency surged to a two-week high of $1.1043 late on Wednesday. It pulled back to stand at $1.0675 in London afternoon deals on Thursday.

Wall Street stocks Thursday opened mostly lower as the dollar bounced back after a dovish Fed policy announcement had hit the greenback in the prior session.

Five minutes into trade, the Dow Jones Industrial Average was at 18,010.81, down 0.36 percent.

The broad-based S&P dropped 0.28 percent to 2,093.72, while the tech-rich Nasdaq Composite gained 0.13 percent to 4,989.23.

Elsewhere Thursday, Greece's ATHEX composite index was the worst performing European market, diving 1.60 percent to 726.16 points before an eagerly awaited summit in Brussels.

Greece's Prime Minister Alexis Tsipras will plead with European counterparts to release vital funds to help his debt-laden country stave off a looming cash crunch.

European Union leaders will also debate whether to extend economic sanctions against Russia over the conflict in Ukraine beyond July, although it is likely they will delay the decision until later in the year.

"With Greek debt again in focus ahead of the EU summit the potential for volatility remains," cautioned Andy McLevey, head of dealing at broker Interactive Investor.