LONDON MARKETS: FTSE 100 Erases Gains As Greece Woes Persist; Tesco Slips

By Carla Mozee and Sara Sjolin, MarketWatch

U.K. stocks erased earlier gains on Wednesday amid a wider selloff in European equities, sparked by lingering concerns about Greece's future in the eurozone.

The FTSE 100 lost 0.7% to 7,017.22, after trading as high as 7,092.34 earlier in the session. An upbeat session in Asia had at first inspired European stocks to climb for a third straight day, but with no catalysts to drive markets higher, traders took on a more cautious approach mid-morning.

One key concern is Greece, where the government is still struggling to reach a reform deal with its international lenders before running out of money and potentially defaulting on some of its loans. Read: Charts show current version of Greek crisis nothing like 2012, so far (http://www.marketwatch.com/story/charts-show-current-version-of-greek-crisis-nothing-like-2012-so-far-2015-04-21)

Tesco earnings: In the U.K., the latest earnings report from Tesco PLC (TSCDY) was a focus. Shares of the supermarket chain dropped 1.3% after Tesco posted its biggest ever full-year loss (http://www.marketwatch.com/story/tesco-posts-biggest-ever-loss-after-turbulent-year-2015-04-22), swinging to a pretax loss of 6.38 billion pounds ($9.54 billion) for the year to Feb. 28. After a turbulent year that revealed a pattern of accounting overstatement, Tesco logged GBP7 billion in charges, including GBP4.7 billion related to the impairment of fixed assets.

Tesco's new chief executive, Dave Lewis, has been making changes at the supermarket company, including closing unprofitable stores and selling noncore assets.

"While Tesco looks like it's on a downward spiral with another major dip in trading profits, its planned recovery strategy promises to steer the retailer back on course," said Simon Johnstone, senior analyst at Kantar Retail, in a note. "A three-pronged attack to improve performance is centered on strengthening the balance sheet, repairing its reputation and rebuilding the brand."

Other movers: Meanwhile, Rolls-Royce Holdings PLC said Warren East will become its next CEO after its current CEO John Rishton retires on July 2. East previously served as CEO of chip designer ARM Holdings PLC . Rolls-Royce shares jumped 3.3%, while ARM shares turned lower, by 0.5%.

Among other decliners, shares of Hargreaves Lansdown PLC fell 3.9% after Jefferies downgraded its rating on the investment services firm to hold from buy.

BOE minutes: The Bank of England's Monetary Policy Committee voted unanimously to keep (http://www.marketwatch.com/story/boe-panel-unanimous-on-rates-see-lift-from-europe-2015-04-22)its benchmark interest rate at a record low of 0.5% at its meeting earlier in April, minutes out on Wednesday showed. However, two officials said the call not to raise rates was "finely balanced".

The FTSE 100 on Tuesday (http://www.marketwatch.com/story/ftse-100-climbs-as-arm-sky-bounce-higher-2015-04-21) finished higher by 0.2%.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires