Investing.com - European stocks were sharply lower on Tuesday, as the breakdown in Greek debt negotiations continued to weigh and as markets eyed the release of German economic sentiment data later in the day.
During European morning trade, the EURO STOXX 50 plummeted 1.24%, France’s CAC 40 tumbled 1.11%, while Germany’s DAX 30 lost 1.40%.
Talks between Greece and European officials ended without an agreement on a cash-for-reforms deal over the weekend, fueling fears over a debt default that would threaten Greece’s future in the euro zone.
Europe wants Greece to make spending cuts worth €2 billion in order to secure a deal that will unlock additional funds before its bailout expires at the end of June and it must repay €1.6 billion to the International Monetary Fund.
European Central Bank President Mario Draghi said Monday that a Greek default would be “uncharted waters,” but added that he believes policymakers have all the tools to manage the situation.
Investors were looking ahead to a meeting of euro zone finance ministers on Thursday, which was being seen as Greece's last chance to strike a deal.
Financial stocks were broadly lower, as French lenders BNP Paribas (PARIS:BNPP) and Societe Generale (PARIS:SOGN) tumbled 1.35% and 1.37%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) plummeted 1.53% and 1.07%.
Among peripheral lenders, Italy's Unicredit (MILAN:CRDI) and Intesa Sanpaolo (MILAN:ISP) dropped 0.66% and 0.70% respectively, while Spanish banks BBVA (MADRID:BBVA) and Banco Santander (MADRID:SAN) lost 0.98% and 1.23%.
Elsewhere, German consumer product manufacturer Henkel AG (XETRA:HNKG) plunged 3.04% following reports U.S. rival Coty Inc (NYSE:COTY) won an auction to buy Procter & Gamble Company (NYSE:PG)’s hair-care unit.
In London, commodity-heavy FTSE 100 declined 0.42%, weighed by sharp losses in the mining sector.
Mining giants Bhp Billiton (LONDON:BLT) and Fresnillo (LONDON:FRES) lost 0.78% and 0.95% respectively, while rivals Glencore Xstrata (LONDON:GLEN) and Rio Tinto (LONDON:RIO) tumbled 1.13% and 1.41%.
Financial stocks added to losses, as Lloyds Banking (LONDON:LLOY) declined 0.61% and HSBC Holdings (LONDON:HSBA) dropped 0.68%, while the Royal Bank of Scotland (LONDON:RBS) retreated 0.88% and Barclays (LONDON:BARC) plummeted 1.17%.
Meanwhile, online gaming company Ladbrokes Plc (LONDON:LAD) surged 2.74% after Morgan Stanley (NYSE:MS) raised its rating on the shares to "overweight."
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.51% drop, S&P 500 futures signaled a 0.51% loss, while the Nasdaq 100 futures indicated a 0.59% decline.