European stocks close lower

Paris - Europe's main stock markets finished the day lower on Tuesday with London's benchmark FTSE 100 index sliding 0.74% to 6 889.13 points.

Frankfurt's DAX 30 index sank 1.14% to close at 11 280.36 points, and in Paris the CAC 40 fell 0.98% to 4 869.25 points.

The euro stabilised at $1.1181 from $1.1182 late in New York on Monday.

"Equities have surged higher in recent weeks on hopes central banks' record low interest rates, combined with the use of unconventional policy tools such as quantitative easing, will continue to drive yield-seeking investors into the stock markets and provide stimulus for economic growth," said Fawad Razaqzada, technical analyst at FOREX.com trading group.

The European Central Bank will unveil Thursday the details of the bond purchase programme it is embarking on later this month.

Greece is also likely to be at the top of the agenda after the recent eurozone deal to extend the aid programme for the debt-wracked country, followed by the latest talk of a possible third bailout, according to Spain's economy minister.

The European Bank for Reconstruction and Development on Tuesday said it would begin funding critically needed investment in cash-strapped Greece as Athens nears the end of a massive bailout programme.

The EBRD said the programme would cover the next five years until 2020 but declined to give a figure for its potential investment after reports it could be as much as €1bn.

"What we will be trying to do is to use the bank's expertise to develop the private sector to promote growth," EBRD president Suma Chakrabarti told a press conference in Brussels.

Barclays shares take hit

On the banking front in London, shares in Barclays shed 2.78% to 255.45 pence after the embattled British bank said it had fallen into a net loss last year, hit by huge costs linked to its alleged role in the rigging of foreign exchange markets.

"The additional foreign exchange provision is unwelcome, whilst other regulatory discussions which may lead to further fines lurk in the background," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.

On the other hand in Lisbon, the shares in Portuguese banks BPI and BCP soared following the publication of a letter showing that businesswoman Isabel Dos Santos, daughter of the Angolan president, proposed studying a possible merger of the pair, which would create the largest private bank in Portugal.

By late afternoon in Lisbon shares in BPI had surged 8.31% while BCP climbed 3.92%, with the PSI Index up an overall 0.19%.

The move by Dos Santos, who holds an 18.6% stake in BPI, is a countermove to a takeover bid by Spain's CaixaBank, BPI's top stockholder with 44.1% of shares.

Also on the upside in London, British American Tobacco shares rose 0.60% to 3,779 pence after it outlined plans to take control of its Brazilian unit Souza Cruz.

BAT said in a statement that it will seek to buy up to 24.7% of Souza Cruz shares which it does not already own, for about $3.5bn.

Wall Street stocks retreated Tuesday, a day after the Nasdaq topped 5 000 for the first time in 15 years and the other main indices finished at records.

Five minutes into trade, the Dow Jones Industrial Average was down 0.20% at 18 251.99 points.

The broad-based S&P 500 shed 0.27% to 2 111.63, while the tech-rich Nasdaq Composite Index fell 0.33% to 4 991.61

Asian equities were mostly lower Tuesday after healthy gains in the previous session attracted profit-takers.