European equities firm on eve of UK election

London - European stocks ticked higher on Wednesday on the eve of a hectic news day that includes a general election in Britain, an interest rate call in the eurozone and vital testimony from sacked FBI chief James Comey in the United States.

"There's a lot of stuff that people are watching," said William Hamlyn, investment analyst at Manulife Asset Management, noting UK investors will "mainly focus" on the snap election.

In late morning deals, London equities won 0.2%, Frankfurt added 0.4% and Paris gained 0.9%.

Thursday also sees the European Central Bank's policy meeting and - in what could potentially be the biggest market-mover - sacked FBI boss James Comey's testimony on President Donald Trump's campaign links to Russia.

Meanwhile, Britain headed on Wednesday into the final day of campaigning for a general election darkened by jihadist attacks in both London and Manchester.

Conservative victory?

Opinion polls predict a win for Conservative Prime Minister Theresa May, but main opposition Labour leader Jeremy Corbyn has gained ground in recent weeks.

Financial markets expect May to triumph against Corbyn, even though the Conservatives' polling lead has narrowed since the start of the campaign.

"I think the markets are definitely pricing in a Conservative win," Hamlyn told AFP.

"If you looked at the polls, you would basically say that markets are being incredibly complacent about the outcome.

"They are certainly not pricing in the odds of a Labour election victory. The polls are split between those that think there is going to be a big Conservative majority, and those that think it is too close to call."

He noted that there was a growing mistrust of opinion polls after they failed to forecast the Brexit referendum last year, the Conservatives' solid victory in May 2015, and Trump's presidential election win last November.

Meanwhile on Wednesday, Asian stocks trod water as they nervously awaited the string of major events that could either hammer global markets or fuel a rally.

Nerves over Comey

"There seems to be a little bit of nervousness in the market over Comey's testimony," added Greg McKenna, chief market strategist at AxiTrader.

"Whether it is geopolitics and the Middle East, worries about James Comey's testimony, the ECB or UK election, traders backed off a little."

Adding to the sense of unease is a brewing crisis in the Middle East, where Saudi Arabia, the United Arab Emirates and Egypt cut off ties and transport links to Qatar, citing its alleged support for extremism.

There are fears the dispute could turn into a wider conflict involving Qatar ally Iran, with Trump wading into the row in a series of tweets signalling support for Riyadh on the issue.

After a recent rally trading floors have quietened as dealers take a wait-and-see attitude, lifting safe-haven assets such as the yen and gold.