European shares end in negative territory on Greece and Spain worries

European shares ended in the red as Greece sails towards a possible default. Investors were unnerved by comments from the Greek government that suggested they may not be able to make repayments to the IMF in early June.

London and Frankfurt were closed but markets in Italy, France, Spain and Greece remained open and headed south in thin trade. The US was also closed so the full impact of recent Greek comments may not be seen until Tuesday’s trading.

The results of Spanish local elections also sapped optimism after the ruling party suffered heavy losses. Mariano Rajoy bore the brunt of voter’s discontent after years of spending cuts and high unemployment.

“There is no doubting that Greece has become a frequent recurring risk to investor sentiment in recent months, and there is potential for investor sentiment to be pulled down even further by the news that anti-austerity parties were declared victorious in several local elections in Spain,” said Jameel Ahmad, analyst at FXTM.

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