European shares extend losses on Greek concerns

European shares extended losses on Thursday as concerns that Greece could be edging closer to a debt default prompted investors to cut their exposure to risk. 

As a deadline for a deal draws near, euro zone finance ministers accused Athens of refusing to compromise, while a senior official of Greece's ruling Syriza party dismissed reform proposals from creditors as "blackmail".

EU leaders will hold a summit on the Greek crisis in Brussels on Thursday.

"Hopes of a quick resolution for Greece seem to be fading," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said. "Where a quick deal seemed to be within reach only a couple of days ago, talks once again seem to be stuck."

Europe bourses in 2015: 

Greece's benchmark ATG share index fell 2.1%.

The country's banking index dropped 4.3%, with National Bank of Greece, Alpha Bank and Bank of Piraeus falling 3.5 to 5.3%.

Asset performance in 2015: 

"There is still a bit of optimism left that a deal can be done ...A failure to reach a deal is certainly not priced into the market just yet," Markus Huber, senior analyst at Peregrine & Black, said in a note.

At 0739 GMT, the pan-European FTSEurofirst 300 index was down 0.3% at 1,572.06 points after closing 0.4% lower in the previous session.

The index hit a three-week high on Tuesday on expectations that Greece and its international creditors were close to finalising an agreement. The index has since retreated 1.6% as negotiations hit further snags.

Among other movers, the world's second-biggest fashion retailer Hennes & Mauritz fell 2.2 percent after saying a stronger dollar would result in gradually increased purchasing costs when sourcing for the coming quarters of 2015.