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London - Eurozone stock markets retreated on Wednesday as renewed questions arose over whether Greece and its international creditors will reach be able to quickly reach a deal needed for Athens to avoid a default and possible messy exit from the euro.
Frankfurt's DAX 30 index fell 0.82% to stand at 11 584.40 points in early afternoon deals.
The CAC 40 in Paris shed 0.57% to 5 028.51 points, with telecoms stocks taking a hammering after a buyout offer that would have consolidated the number of mobile operators in France from four to three was rejected.
Madrid's IBEX 35 was down 0.90% Milan's FTSE MIB was 0.73% lower, and Athens' ATHEX Composite dove 3.25%.
Outside the eurozone, London's benchmark FTSE 100 index remained in positive territory, trading 0.30% higher at 6 855.36 points.
The euro rose to $1.1191, from $1.1168 late on Tuesday in New York.
The jitters across European bourses appeared driven by reports that the International Monetary Fund was not prepared to accept some of the new proposals Greece presented Monday, which relied more on tax hikes than the spending cuts and deep structural reforms that creditors have been seeking.
"IMF differences over the latest proposals from Athens dampened investor risk appetite that had been lifted by hopes of an imminent deal. Creditors then rejected the Greek proposals, adding to downside momentum in European stocks," said Jasper Lawler, market analyst for CMC Markets.
He noted, however, that the losses had not wiped out the two days of share price gains across Europe fuelled by hopes of a Greek deal.
"European stocks were up close to 5% in the past two days but are down just 1% on news the deal was rejected. The markets are showing a bit more of a propensity to melt up than melt down," Lawler said.
With the coming days packed with consultations between Greece and its creditors, markets are likely face a heady week, said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor.
"Equity markets continue to put their faith in a potential deal for Greece, with perceptions of risk falling across Europe and sending markets higher... The next few days will prove pivotal" O'Keeffe said.
Greek Prime Minister Alexis Tsipras will meet the leaders of Greece's creditors - the EU's Jean-Claude Juncker, the European Central Bank's Mario Draghi and the IMF's Christine Lagarde - in Brussels on Wednesday to discuss the latest proposals that Athens has made.
Eurozone finance ministers will also meet on the proposals ahead of an EU summit on Thursday.
The Greek proposals were a last-ditch bid to unlock the final €7.2bn tranche of its current bailout programme. If it fails to get the funds it will almost certainly be unable to make a €1.5bn payment to the IMF at the end of the month.
In France shares in telecoms companies fell after the board of French group Bouygues late on Tuesday unanimously rejected the buyout offer made for its network made by rival group Altice.
In early afternoon trading, shares in Bouygues, the parent company of Bouygues Telecom, slumped 6.23% to €35.53.
Meanwhile shares in Altice's French telecoms unit, Numericable-SFR plunged 11.49% to €48.21.
Shares in market leader Orange fell by 2.78% to €14.535 and the stock in Iliad, parent company of low-cost operator Free, dove by 6.16% to €214.15.
Meanwhile shares in Dutch retail giant Ahold and its Belgian rival Delhaize fell on Wednesday after they officially announced their merger, creating one of the world's largest retail companies with a turnover of more than €54bn.
Ahold shares reversed early gains to trade 0.40% lower in Amsterdam at €18.88, while shares in Delhaize were down 4.92% to €83.70 in Brussels, the day after rising more than 8% on rumours of the deal.
