LONDON (AFP) –
European stocks tipped lower on Wednesday, despite earlier gains in Tokyo and overnight on Wall Street, as investors awaited a crucial G20 summit in London, dealers said.

Financial markets were also cautious on the eve of a likely eurozone interest rate cut from the European Central Bank.

In early morning trade, Frankfurt fell 1.75 percent, Paris shed 1.79 percent and London lost 1.72 percent in value. All three markets had rallied Tuesday on bargain-hunting.

Elsewhere Wednesday, the picture was brighter in Tokyo, where shares surged 2.99 percent, but Hong Kong pulled 0.42 percent lower.

"Markets could tread water until we get a clear message of intent from the G20 summit," said Chris Hossain, senior sales manager at ODL Securities.

US President Barack Obama arrived Wednesday for talks with British Prime Minister Gordon Brown on the eve of a crunch G20 summit aimed at fixing the battered global economy.

At the London summit, the United States wants to secure a coordinated international stimulus package -- but is facing a split with European countries such as France and Germany.

"As G20 leaders convene in London ahead of tomorrow's summit, there does not seem to be much hope of major concerted new stimulus measures emerging, though the summit is clearly putting pressure on countries to probe more deeply new national-level initiatives to support demand," said Barclays Capital analyst Julian Callow.

Britain, the eurozone, Japan and the United States are all mired in a deep recession that has been sparked by the global financial crisis and accompanying credit crunch.

In Wall Street action on Tuesday, US stocks rebounded after two consecutive trading days of heavy selling to post their first monthly gain in eight months even as economic data remained uninspiring.

The Dow Jones Industrial Average jumped 1.16 percent to end at 7,608.92 points as investors also went on "window dressing" their portfolios at the end of the first quarter on Tuesday.

Elsewhere in Asia on Wednesday, Seoul added 2.25 percent and Shanghai won 1.47 percent, while Sydney closed flat.

"The new quarter is set to start with a modest reversion in European equity markets as traders take stock of yesterday's bumper rally and also look to factor in that late selling on Wall Street," said CMC Markets dealer Matt Buckland.

"A fairly solid start to the month in Asia does suggest that there may be more upward momentum to be seen."

ZURICH (Reuters) –
UBS AG's (UBSN.VX) (UBS.N) new chief executive hired a former colleague from rival Credit Suisse (CSGN.VX) on Wednesday to lead a cost-cutting drive at the loss-making Swiss bank.

Oswald Gruebel, a former Credit Suisse CEO brought out of retirement by struggling UBS in February, named Ulrich Koerner -- whom he touted as an expert in processes, systems and technologies -- as chief operating officer.

UBS said Koerner had a track record as a "turnaround manager" at Credit Suisse, his employer until last September, and would seek group-wide "measures to enhance profitability and cost efficiency," supporting Gruebel and division heads to develop and implement strategy.

An analyst said the appointment, which should increase accountability within the bank, showed Gruebel was starting to make his mark on UBS.

Koerner will oversee the bundling of group-wide units like personnel management, procurement, real estate and facility management into the bank's corporate center.

Information technology units of the business divisions will also be consolidated at group level, which UBS said should create "sustainable efficiency increases and cost savings."

Shares in UBS, which have tumbled in recent days on fears that the bank would announce further writedowns as Gruebel seeks to get all the bad news out of the way, were up 1.3 percent at 10.84 Swiss francs at 0847 GMT, outperforming a 2.7 percent fall in the DJ Stoxx European banking sector index (.SX7P).

Vontobel analyst Teresa Nielsen welcomed the fact Gruebel was starting to act and said his appointment of Koerner should create an environment in which employees were more accountable.

"We believe Ulrich Koerner has a very good background in restructuring seen (most recently) at Credit Suisse and see the change as positive for the future strategy of UBS," she said in a note to clients, confirming her "buy" recommendation on the stock.

A UBS spokesman said the bank could not quantify potential savings from the moves.

The areas to be centralized, including IT, personnel, procurement and facility management, currently employ about 15,000, many of them in Switzerland, the spokesman said.

The bank has already announced thousands of jobs cuts in the crisis, aiming to bring its total workforce to around 75,000 by the middle of the year, from about 77,000 in February.

TIGHTER RISK, LEGAL CONTROL

Gruebel had already signaled that further cost cuts would be inevitable.

UBS also said it is strengthening the management of its finance and risk control as well as its legal and compliance functions at the group level, which it said would make control functions stronger and more effective.

The tarnished Swiss bank is struggling to rebuild its once powerful brand after massive investments in risky U.S. assets forced it to accept a government bailout last year.

The bank revised up its 2008 net loss to 20.9 billion Swiss francs ($18.37 billion) on March 11 to include a $780 million fine to settle a damaging U.S. tax probe case.

It said at the time its near-term outlook was extremely cautious, warning that its balance sheet remained exposed to illiquid and volatile markets.

A German-Swiss dual national born in 1962, Koerner joined Credit Suisse in 1998 and held various management positions, including COO and Chief Financial Officer of a business unit.

His last job at Credit Suisse was heading the Swiss client business, before he left the bank last September.

Koerner, who has a doctorate from the St. Gallen university in business administration, previously worked as an auditor and management consultant, mainly for financial services firms.

He replaces Walter Stuerzinger, currently COO of the corporate center, who UBS said will leave the board but has committed himself to supporting Koerner.

($1=1.138 Swiss Franc)

(Editing by John Stonestreet and Hans Peters)