LONDON ( The Deal) -- After last week's premature sighs of relief, European markets were taking an altogether gloomier view of the Greek situation on Monday, with the prospect of that country's exit from the euro looking more realistic by the day.

A defiant speech to parliament on Sunday from the new radical premier Alexis Tsipras warning his government will not ask for an extension to the country's bailout from the European Union and the International Monetary Fund has put the cat firmly back among the pigeons. The terms of the bailout have been onerous, but Greece's European partners -- not just the Germans but also countries such as Portugal and Spain that have gone through their own bailouts without flinching -- are in no mood to meet Greek demands.

Meanwhile, the mood music ahead of a meeting of Eurozone finance ministers on Wednesday and a European Union summit on Thursday and Monday's G20 meeting of central bank governors is loudly discordant.

Greek bond yields soared on Monday, while equities tumbled, further battered by figures showing that Greek industrial production fell by 3.8% in December, compared with December 2013. That was a much worse outturn than expected.

National Bank of Greece  (NBG) was down 10%, Piraeus Bank  (BPIRY) was down 14.21% and Alpha Bank  (ALBKY) was down 9.09%. The Athens Composite Index was down 5.29% at 759.96.

In other news, Britain's biggest bank HSBC Holdings  (HSBC) fell 1.48% after reports that its Swiss private banking subsidiary had helped clients aggressively avoid taxes in the U.K. and elsewhere before 2007. The reports said the U.S. France and Argentina were already taking legal action against the bank. HSBC said it has taken "significant steps over the past several years" to implement reforms, shrink its private client base and change its behavior.

British chip maker ARM Holdings (ARMH) dropped 1.83%  after announcing the acquisition of Dutch "Internet of Things" security software company Offspark. Offspark's PolarSSL technology is widely embedded in IOT security and will be rebranded as ARM mbed TLS. But it will remain open source and available to developers for commercial use.

The FTSE 100 was down 0.54% at 6,816.54, while in Paris the CAC 40 was off 0.82% at 4,652.76. In Frankfurt, spooked both by Greece and the impasse in Ukraine, the DAX was down 1.36% at 10,698.79.

In Tokyo, the Nikkei 225 was up 0.36% at 17,711.93, while Hong Kong's Hang Seng closed down 0.64% at 24,521.0. The Shanghai Composite was up 0.62% at 3,095.12.