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Europe: Shares extend slide, with Greece set to default on IMF loan


[LONDON] European shares fell on Tuesday for a second straight session as a conflict between Greece and its lenders intensified, with Greece looking set to default on a major international loan.

The pan-European FTSEurofirst 300 index was down 0.5 per cent at 1,523.23 points by 0705 GMT, extending falls after a 2.8 per cent slump on Monday.

With Greece hours away from defaulting on a 1.6 billion euro loan from the International Monetary Fund, tens of thousands of Greeks rallied on Monday to back their leftwing government in a clash with foreign lenders which has pushed Greece close to financial chaos and forced a shutdown of its banking system.

While European Commission President Jean-Claude Juncker made a last minute offer in a bid to reach a deal before Tuesday's deadline, there was little sign that Greek Prime Minister Alexis Tsipras was prepared to drop his repeated rejections of the bailout offer.

Market voices on:

"Greece (remains) centre stage and the wide consensus points to a default on Tuesday," Jonathan Sudaria, trader at London Capital Group, said in a note.

Eurozone stocks suffered their biggest one-day fall since 2011 on Monday, with southern European banks in particular getting pummeled after Greece shut its banks and imposed capital controls.