LONDON, May 16 (Reuters) - European equity markets were expected to set fresh lows on Wednesday, with investors fretting about a possible Greek exit from the euro zone and its unpredictable ramifications for the rest of the region. Financial spreadbetters expected Britain's FTSE 100 to open 51 to 53 points lower, or as much as 1 percent, Germany's DAX to fall 38 to 47 points, or up to 0.7 percent, and France's CAC-40 to drop 13 to 20 points, also around 0.7 percent. The euro hit a four month low versus the dollar in Asian trade on Wednesday as investors continued to ditch European assets after Greek politicians failed to put together a ruling coalition following the inconclusive May 6 elections, forcing them to form a caretaker government and plan fresh polls. The new vote, expected in mid-June, could tip the balance of power towards leftist parties opposed to the terms of Greece's international bailout.

"Ahead of the second round of Greek elections, the Greek crisis will continue to frustrate markets, keeping sentiment under pressure," strategists at Credit Agricole said in a note. The FTSEurofirst 300 fell 0.7 percent on Tuesday, setting fresh 2012 lows, as Greek concerns outweighed some better than expected economic data from Europe and the United States. Spain's IBEX fell as far as 6,644, its lowest since June 2003, hit by worries about the health of its banking sector and any possible spillover from Greek troubles. Europe's heavyweight commodity and energy companies were likely to be hit by further retreats in the prices of natural resources. Adding to the gloom for the sector, BHP Billiton , the world's biggest miner, said it expects commodity markets to cool further and that investors had lost confidence in the longer-term health of the global economy. -------------------------------------------------------------------------------- LAST PCT CHG NET CHG S&P 500 1,330.66 -0.57 % -7.69 NIKKEI 8,770.36 -1.46 % -130.38 MSCI ASIA EX-JP <.MIASJ0000PUS -2.8 % -13.68 EUR/USD 1.2712 -0.14 % -0.0018 USD/JPY 80.37 0.22 % 0.1800 10-YR US TSY YLD 1.764 -- -0.01 10-YR BUND YLD 1.459 -- -0.01 SPOT GOLD $1,536.01 -0.52 % -$8.09 US CRUDE $92.69 -1.37 % -1.30 GLOBAL MARKETS: Shares fall as Greek turmoil saps risk appetite S&P 500 in third straight drop, JC Penney off late Nikkei falls 0.9 pct, deep in "oversold" territory TREASURIES OUTLOOK: Prices flat as Greece offsets profit-taking Euro hits 4-month low, dogged by Greek turmoil PRECIOUS: Gold hits 4-1/2 month low on Greek turmoil METALS: London copper slips to 4-mth low on Greece woes Oil falls $1 on rise in U.S. stocks, econ woes CORPORATE NEWS: LUFTHANSA The airline is interested in purchasing Portugal's flag carrier that is set to be privatised this year, the Financial Times reported on Wednesday.

NYSE EURONEXT The group is out of the race to buy the London Metal Exchange, a spokesman said on Tuesday, after its reported 800 million pound (US$1.28 billion) bid was deemed too low. REPSOL YPF The large Spanish oil and gas company, on Tuesday sued Argentina for seizing control of formerly state-owned energy company YPF SA, in which Repsol held a majority stake. EADS Boeing Co is on track to hit its production rate target for the 787 Dreamliner next year and is studying the possibility of raising that target, the head of the planemaker's commercial airplanes unit said on Tuesday.