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Europe ends lower, hours ahead of Greece deadline

European equities closed in the red on Tuesday as Greece remained firmly in the spotlight for investors.

The embattled country looks likely to default on a 1.6-billion-euro ($1.8 billion) debt payment due to the International Monetary Fund (IMF) later in the day, with its externally-funded bailout due to expire at midnight.

The pan-European Stoxx 600 extended losses to close around 1.3 percent lower.

Greek stock markets remained closed on Tuesday, following the introduction of capital controls.

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FTSE
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IBEX 35
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The U.K.'s FTSE 100 closed around 1.5 percent lower, despite U.K. economic growth for the first quarter being revised upwards. The Office of National Statistics reported on Tuesday that the economy grew by 2.9 percent in the first three months of 2015 from the same time last year.

Germany's DAX, France's CAC closed around 1.3 percent lower and 1.6 percent lower respectively, having spent most of the session hanging onto gains.

Europe's banking stocks were among the top performers, after clocking losses over the previous session. Italy's Banca Popolare di Milano ended over 2 percent higher, with Austrian lender Raiffeisen bank finishing around 1.4 percent higher.

Meanwhile, the U.K.'s Home Retail climbed to the top of the Stoxx 600, closing over 4 percent higher after Morgan Stanley upgraded its rating on the stock.

Across the Atlantic, U.S. stocks held higher in choppy trade Tuesday, attempting recovery from the worst trading day of the year, as investors turned more optimistic on the Greece crisis

Greek fears

Greek officials have already warned that the country is unable to pay the money due to the IMF, after reforms-for-aid talks with creditors broke down at the weekend.

On Tuesday, Athens proposed a new, two-year bailout deal with the European Stability Mechanism. This would be to "fully cover its financing needs and the simultaneous restructuring of debt," according to a translated press release from the office of the Greek Prime Minister.

The new proposal is expected to be discussed by the Eurogroup of euro zone finance ministers later on Tuesday.

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