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London - European equities retreated on Thursday, with growing concerns about Greece's debt situation prompting investors to take some profits after the previous session's 14-year highs.
Greece's ATG share index fell 0.8% as the Financial Times reported the International Monetary Fund had rebuffed a request from the country to delay loan repayments.
Greek two-year yields surged to their highest since the bonds were issued last year. Athens is dangerously close to running out of cash, with its reserves expected to dip into negative territory after April 20, a source familiar with the matter has said.
"The equity market is now worried that the Greek situation could escalate. We have seen some spill over of Greece uncertainties into government bond markets. The question is how much calamity will come from this development," Gerhard Schwarz, head of equity strategy at Baader Bank in Munich.
"Other key indexes, such as Germany's DAX, have also been hit because of cautious trading."
The pan-European FTSEurofirst 300 index was down 0.8% at 1 637.72 points by 13:00, Germany's DAX index fell 1.5% and Italy's FTSE MIB dropped 1.1%.
Among sectoral decliners, media stocks were led lower by Pearson, which fell sharply following troubles with one of its educational technology projects. Pearson said it stood by the quality of its performance.
The STOXX Europe Media index dropped 1.2%, the top sectoral decliner, dragged down by a 3.5% fall in Pearson after a report saying the Los Angeles Unified School District was seeking a refund from Apple over a bungled $1.3bn iPad plan with a curriculum from Pearson.
The market also came under pressure after some discouraging broker comments and company updates hit individual stocks.
French retailer Casino fell 5%, the top faller in the FTSEurofirst 300 index, after both Societe Generale and Natixis cut their target prices for the stock a day after the company reported slower sales growth.
Diageo, the world's largest spirits maker, fell 2.5% after saying net sales in the three months to March 31, the third quarter of its financial year, fell 0.7%.
Bucking the trend, CNH Industrial rose 3.7% after Goldman Sachs raised its price target for the stock to $8.50 from $6.80, while Unilever was up 4.1% after reporting better-than-expected sales for the first quarter.
SABMiller gained 2.6% after reporting a marginal rise in full-year beverage sales volumes.
The FTSEurofirst 300 index gained 0.6% on Wednesday to reach levels not seen since 2000 with the European Central Bank saying it remained committed to its full asset-buying programme to revive the eurozone economy.
