LONDON (TheDeal) -- A global selloff of government bonds weighed on European stock indices on Tuesday amid little progress on a resolution to the Greek debt crisis.
Talks on Monday between Euro Group finance ministers and Greek counterpart Yanis Varoufakis failed to deliver a breakthrough that would trigger the release of €7.2 billion ($8.1 billion) in rescue funding. The cash-strapped country transferred €750 million owed to the International Monetary Fund just hours before a repayment deadline but Finance Minister Varoufakis spoiled any market-boosting benefit of that move with a comment that Greece could go bust "in a couple of weeks."
Southern European government bond yields rose in the double digits, and in Germany the yield on benchmark 10-year bond was up 7 basis points at 0.68%. Bond yields rise when prices fall, which is typically a response to the specter of higher inflation.
In the U.K., March industrial output and manufacturing sector figures from the Office for National Statistics beat consensus forecasts. The yield on U.K. gilts rose 7 basis points to 2.02%.
In London, the FTSE 100 fell 1.66% to 6,913.29. In Frankfurt, the DAX fell 2.28% to 11, 406.99. And in Paris, the CAC 40 dropped 1.91% to 4,931.71.
The Athens General Index was up marginally.
In London, OneSavings Bank fell after financial backer JC Flowers sold a 6.5% stake in a secondary offer. The buyout firm has also distributed a 1.3% stake to investors in its own funds. But consumer banking market leader Lloyds Banking (LYG) shrugged off a sale by the government of about £634 million ($986 million) of shares, which cut the state's stake to 19.9%.