TurboForex - European stocks were sharply lower on Monday, as mounting concerns over a potential Greek default weighed heavily on equity markets and as investors eyed a speech by European Central Bank President Mario Draghi due later in the day.
During European morning trade, the EURO STOXX 50 lost 1.12%, France’s CAC 40 retreated 0.89%, while Germany’s DAX 30 tumbled 1.18%.
European equities were hit after talks in Brussels between Greece and European Union representatives failed to reach an agreement on pension reforms, budget targets and tax rates, adding to 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, 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.
EU officials blamed the collapse in talks on Greece, saying it had failed to offer any new reforms to secure the funding it needs.
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) dropped 0.98% and 0.96%, while Germany's Commerzbank (XETRA:CBKG) and Deutsche Bank (XETRA:DBKGn) declined 0.55% and 1.25%.
Among peripheral lenders, Italy's Unicredit (MILAN:CRDI) and Intesa Sanpaolo (MILAN:ISP) tumbled 1.16% and 1.97% respectively, while Spanish banks Banco Santander (MADRID:SAN) and BBVA (MADRID:BBVA) lost 1.08% and 1.27%.
Elsewhere, Metro AG (XETRA:MEOG) plummeted 1.93% after the German retail company agreed to sell its Galeria Kaufhof stores to Hudson’s Bay Co. for €2.83 billion.
Deutsche Annington Immobilien SE (XETRA:ANNGn) added to losses, as shares plunged 6.64% after Germany’s largest property company agreed to buy Sudewo Group for €1.9 billion.
In London, FTSE 100 slid 0.38%, as U.K. lenders mostly tracked their European counterparts lower.
Shares in Barclays (LONDON:BARC) fell 0.38% and HSBC Holdings (LONDON:HSBA) dropped 0.43%, while the Royal Bank of Scotland (LONDON:RBS) declined 0.48%. Lloyds Banking (LONDON:LLOY) shares were little changed, down just 0.01%.
International Airlines Group (LONDON:ICAG) was also on the downside, with shares tumbling 1.59% after founder of Virgin Atlantic Richard Branson said last week that it would be "absolutely wrong" if IAG was allowed to buy Aer Lingus (IR:AERL), adding that it would weaken competition in the U.K.
Meanwhile, mining stocks posted sharp gains on the commodity-heavy index. Anglo American (LONDON:AAL) saw shares climb 0.70% and Randgold Resources (LONDON:RRS) advanced 0.98%, while rival Fresnillo (LONDON:FRES) jumped 1.90%.
In the U.S., equity markets pointed to a lower open. The Dow Jones Industrial Average futures pointed to a 0.25% fall, S&P 500 futures signaled a 0.23% loss, while the Nasdaq 100 futures indicated a 0.28% decline.