LONDON: European stock markets slumped Thursday over a lack of progress in negotiations between Greece and its creditors, with talks set to continue as a loan repayment looms for Athens.
In the eurozone, the CAC 40 in Paris lost 0.93 percent to 4,987.13 points, and Frankfurt's DAX 30 dropped 0.69 percent to 11,340.60 points.
Greece's main index ended the day with a loss of 1.32 percent, after having opened with a three percent drop after Greece and its creditors failed to reach a breakthrough at crunch talks in Brussels late on Wednesday.
Milan fell 1.15 percent and Madrid lost 1.08 percent.
Outside the eurozone, London's benchmark FTSE 100 dropped 1.31 to 6,859.24 points, with mining and energy stocks hit hard
"Greece's day of reckoning is nearly upon us and traders can't get out of the market fast enough," said David Madden, market analyst at IG trading group.
"We are back to the bad old days of the eurozone debt crisis, when equity markets around Europe are selling off hard and fast."
The European single currency dipped to $1.1263 from $1.1270 late in New York on Wednesday, having shot to a two-week high of 1.1380 during the session.
Greece and the EU on Thursday said debt talks would continue towards reaching a deal on disputed reforms, as Athens begins to feel the heat of a wave of June debt repayments.
With more than 300 million euros due to the IMF on Friday, the radical left Greek government was under mounting pressure to reach a default-averting agreement with its creditors.
European sources in Brussels said Greek Prime Minister Alexis Tsipras, European Commission chief Jean-Claude Juncker and creditors will likely meet again on Friday.
Greek government sources said Tsipras is also scheduled to brief the Greek parliament on the negotiations Friday, but that no vote was expected.
European stocks pulled off their lows as it appeared clearer that Greece would likely meet Friday's payment, and as the reforms being required of Athens became known.
- Royal Mail takes a licking -
In London, resource shares took a pounding due to the increasingly poor perspectives for global growth.
"Sustained losses for BP and Rio Tinto, representative of their sectors, has dragged the UK index down for the entire day," said Spreadex analyst Connor Campbell.
Shares in Anglo American dropped 4.10 percent to 1,005 pence, BHP Billiton fell 3.18 percent to 1,323.50 pence and Rio Tinto shed 1.09 percent to 2,850 pence.
On the eve of an OPEC meeting where the cartel is expected to keep its crude output levels unchanged, shares in BP fell 2.09 percent to 440.15 pence and Shell's "A" share lost 1.88 to 1,901.5 pence.
Royal Mail stock prices fell 4.94 percent to 500 after the government said it would sell its remaining 30 percent stake to earn an expected £1.5 billion ($2.3 billion, two billion euros).
In Paris, shares in Areva gained 2.21 percent to 8.94 after the government said it would invest as much as needed to rescue the state-held nuclear company, and merge its reactor business with electricity firm EDF.
US stocks retreated after the IMF called for the US Federal Reserve to delay its planned interest rate increase until 2016.
In midday trading, the Dow Jones Industrial Average was down 0.64 percent to 17,960.70 points.
The broad-based S&P 500 dropped 0.61 percent to 2,101.07, while the tech-rich Nasdaq Composite Index fell 0.49 percent to 5,074.14.
In Asia on Thursday, Shanghai stocks recovered from a huge plunge to end higher while Tokyo's early gains wilted to almost nothing.
Shanghai slumped 5.2 percent at one point after a brokerage imposed restrictions on margin borrowing, limiting a crucial avenue of cash.
"China's economy is too dependent on credit and it feels like the pressure cooker is about to blow," said analyst Madden.
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