Investing.com - European stocks dropped sharply on Tuesday, weighed by growing concerns over Greece as talks with its euro zone partners broke down on Monday after Athens rejected a proposal to extend its bailout.
During European morning trade, the EURO STOXX 50 lost 1.45%, France’s CAC 40 plummeted 1.38%, while Germany’s DAX 30 tumbled 1.40%.
Markets were jittery as Greece’s current €240 billion bailout is due to expire at the end of the month and the new Greek government does not want it extended. Athens rejected a proposed six-month extension of the bailout on Monday, calling it "unacceptable".
Athens has until Friday to request an extension otherwise its bailout will expire on February 28 and the country will run out of money.
The clash between Greece and its creditors has sparked fears that it could trigger the country’s exit from the euro zone. The European Central Bank was to decide whether to suspend emergency financial support for Greece later in the day.
Financial stocks were mixed, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) tumbled 1.45% and 1.95%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) gained 0.58% and 1.53%.
Among peripheral lenders, Italy's Intesa Sanpaolo (MILAN:ISP) and Unicredit (MILAN:CRDI) lost 1.07% and 1.44% respectively, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) declined 0.60% and 1.11%.
Elsewhere, TNT Express (AMS:TNTE) plunged 9.11% after the Dutch delivery service said the year 2015 will be challenging after sales last year fell and the company's net loss widened by 60%.
Also on the downside, Orange (PARIS:ORAN) plummeted 1.71% after the French telecommunications company forecast a decline in earnings this year.
In London, commodity-heavy FTSE 100 declined 0.53%, weighed by losses in the mining sector.
Shares in Bhp Billiton (LONDON:BLT) and Rio Tinto (LONDON:RIO) slid 0.47% and 0.49% respectively, while Glencore Xstrata (LONDON:GLEN) dropped 0.72% and Antofagasta (LONDON:ANTO) lost 1.20%.
Financial stocks added to losses, as Lloyds Banking (LONDON:LLOY) edged down 0.09% and the Royal Bank of Scotland (LONDON:RBS) tumbled 1.16%, while Barclays (LONDON:BARC) plummeted 1.33%. HSBC Holdings (LONDON:HSBA) overperformed on the other hand, rising 0.23%.
Meanwhile, Sports Direct (LONDON:SPD) saw shares retreat 3.61% following reports earlier in the week the retailer and administrators for collapsed fashion retailer USC are facing an investigation by the U.K. government’s Insolvency Service as former employees take legal action over a controversial restructuring of the chain.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.48% decline, S&P 500 futures signaled a 0.59% drop, while the Nasdaq 100 futures indicated a 0.26% loss.
Later in the day, the ZEW Institute was to report on German economic sentiment. The U.S. was to release data on manufacturing activity in New York State as well as a private sector survey of home builders.