Britain's FTSE dragged down by M&A news, Greek jitters
* FTSE 100 down 0.6 pct, just short of 7-week lows
* Severn Trent down 8.9 percent as bidder walks away
* Charts point to more gains above 6,250
By Toni Vorobyova
LONDON, June 12 (Reuters) - Britain's FTSE 100 slipped towards seven-week lows on Wednesday, with Severn Trent sinking after a bidder walked away, and with broad sentiment on the market soured by renewed about bailed-out Greece.
Problems in the euro zone - Britain's top trading partner - were brought back into the spotlight after the shutdown of the Greek state broadcaster sparked tensions in the fragile three-party government, where the two junior coalition members had opposed the move.
The FTSE 100 closed down 40.63 points, or 0.6 percent at 6,299.45 points. Concerns remained that the U.S. Federal Reserve may soon start to scale back its quantitative easing stimulus programme.
"The Greece news this afternoon is causing a bit of a distraction ... it's the political uncertainty in the euro zone that's the issue," said Dan Reed, trader at Beaufort Securities.
"The tapering off of QE is (also) on everybody's mind, and that's the overall problem. The intra-day lows of April are very easily done ... I would definitely be buying it at those levels with tight stops, may be slightly higher than 6,230."
Among the individual stocks, Severn Trent was by far the worst performer, down 8.9 percent after a consortium walked away from its bid for the water utility.
Merger and acquisition news also hit heavyweight Vodafone , which sold off making a preliminary takeover bid for Kabel Deutschland.
"The deal has strategic merits but it will be hard for Vodafone to pay a significant premium above the current price, which will be required to close the deal and still stick to its merger criteria," analyst at Lieberum Capital said in a note. "We would recommend traders switching to BT near term."
Vodafone closed down 11.0 pence, or 5.7 percent, although 6.9 pence of the fall came from the telecoms group trading without entitlement to its latest dividend.
The FTSE 100 as a whole, though, stopped short of testing the seven-week lows of 6,280.08 points set on Tuesday, with technical charts left the door open for further gains.
"The last major swing point low for the index was in April, around the 6,250 level ... so as long as that's intact I am pretty happy that the medium uptrend remains," said Dominic Hawker, technical analyst at Messels. (Editing by Jeremy Gaunt.)