European shares extend losses as Greece headed for debt default
* Euro STOXX 50 ends 1.3 pct lower
* Greece hours away from debt default
* Luxury sector hit by BofA Merrill Lynch downgrade
By Atul Prakash
LONDON, June 30 (Reuters) - European shares extended the previous day's steep declines in choppy trading on Tuesday as Greece headed towards default on a crucial debt payment to the International Monetary Fund.
Greece pleaded for a short-term bailout extension in frantic efforts to salvage a deal that could keep Athens in the euro.
But German Chancellor Angela Merkel said Germany would not negotiate on a new bailout agreement for Greece before its planned referendum on Sunday, while a euro zone official said there was "no way" euro zone finance ministers would release funds for Greece to meet the IMF payment due by midnight.
"Greece was playing a game of poker and they lost because its creditors didn't blink," Koen De Leus, senior economist at KBC, said, adding that Sunday's referendum was likely to increase difficulties for Greek Prime Minister Alexis Tsipras.
"If there is a 'yes' vote, Greece might see a new government and if the voters say 'no', then the country would head towards economic chaos." Continuación...