LONDON: European equities closed lower Thursday on fresh worries over Greece, and as investors cashed in gains after London surged to a record peak the previous day.
London's FTSE 100 index ended the day 0.51 percent down at 7,060.45 points, after having soared the previous day to a record intra-day high of 7,111.72.
In Paris, the benchmark CAC 40 index closed 0.57 percent lower at 5,224.49 points, and Frankfurt's DAX 30 slid 1.90 percent to 11,998.86 compared with Wednesday's close.
Madrid's Ibex 35 shed 1.42 percent, while Milan's FTSE Mib dropped 1.75 percent as eurozone tussles with Greece loomed large in investors' minds.
"Worries over the Greek situation appear to be increasing, with the EU indicating that Greece's negotiations with international creditors are going very slowly and are nowhere near the point where bailout money can be released," said Augustin Eden at Accendo Markets.
"The Greek government is running out of money fast and threatening to default on its next debt repayment if funds are not made available."
The region's equities had rebounded Wednesday as weak Chinese economic growth data stoked Beijing stimulus hopes while the European Central Bank (ECB) pledged to fully implement its stimulus measures.
However, sentiment was soured after trading closed when Standard and Poor's cut its long-term credit rating for Greece by one notch to CCC+, a level at which borrowers are considered as being vulnerable to default, saying Athens needs further reforms and help.
Negotiations between Athens and its EU-IMF creditors are hurtling towards an April 24 deadline.
Athens desperately needs a deal to unlock 7.2 billion euros ($7.6 billion) -- the last tranche of a 240-billion-euro bailout accorded in 2010 -- but the EU and IMF want tougher reforms from Greece.
"European equities trimmed post-ECB gains when S&P cut Greece's rating to CCC+ with a negative outlook," noted strategist Nour Al-Hammoury at ADS Securities in Abu Dhabi.
Meanwhile, on the debt markets Thursday, the yield on benchmark 10-year German bonds fell below the 0.1 percent level for the first time as the ECB's massive 1.1-trillion-euro ($1.2 trillion) sovereign bond purchase scheme unfolds.
The rate of return to investors fell to as low as 0.098 percent, from 0.107 at the close of trading on Wednesday.
The yield on shorter-term German bonds, as well as those of several other eurozone countries, have fallen into negative territory, meaning investors are in effect paying governments to hold their money.
The negative rate phenomenon is an effect of the ECB's so-called quantitative easing or QE programme as it is buying up massive amounts of bonds, while many investment vehicles such as mutual and pension funds have to buy certain amounts of government bonds which are viewed as a safe investment.
Fears of deflation and market volatility may also make negative-yielding bonds attractive for investors.
In foreign exchange activity, the European single currency advanced to $1.0726 from $1.0684 late in New York on Wednesday.
"As the (new) jobless claims figure gradually climbs towards 300,000 the dollar suffered a blow this afternoon," said Spreadex analyst Connor Campbell.
"The worse the jobs sector the less likely the Fed will be to raise rates, leading to notable rebounds from the previously damaged pound and euro," he added.
Wall Street indices were mixed in late morning trading, following mixed earnings and weaker than expected US economic data.
After an initial drop, the Dow Jones Industrial Average rebounded with a slight 0.02 percent increase to 18,115.79 points.
The broad-based S&P 500 bounced back from a similar early slip, rising 0.51 percent to 2,106.63 points.The tech-rich Nasdaq Composite Index, meanwhile, started lower and remained that way with a 0.03 percent slip to 5,009.53 points.
Back in London on Thursday, investors mulled mixed results from British beverage giants Diageo and SABMiller.
Diageo shares sank 3.58 percent to 1,896.50 pence after announcing that third-quarter sales sank on the back of a poor performance in Asia, Europe and Latin America.
SABMiller however gained 1.42 percent to 3,636 pence after logging upbeat annual sales.
The biggest riser on the FTSE was British household goods group Unilever, whose share price ended at 2.62 percent to 3,011 pence after even larger earlier advances following news of rising quarterly revenues.
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