OREANDA-NEWS. February 18, 2015. Greek stocks fell on Tuesday, weighing on broader European indexes, after debt talks between Athens and its euro zone peers broke down, putting the country's future in the shared-currency bloc at risk.

The main Athens index fell as much as 4.7 percent after the open. It then recovered the lost ground only to drop once more, to close 2.45 percent down on the day.

After the market close on Monday, Greece rejected a proposal for a six-month extension of its international bailout package as "unacceptable", setting it at odds with its creditors.

However, Greece said it was "cautiously optimistic" a deal would be found, and traders said that the market was pricing in the prospect of a last minute deal.

"The costs of a Greek exit are so great for Greece, they will eventually strike a deal. Yesterday's meeting should not be seen as a failure, but more part of a necessary process," said James Butterfill, global equity strategist at Coutts.

"While... the impact on euro zone economic growth of Greece leaving would be minimal, the concern is that a Greek exit could undermine confidence in the whole euro project."

Greek banks dropped 9.3 percent early in the session, recovering only slightly to close down 6.4 percent.

Euro zone banks recovered from an early fall to end 0.3 percent higher, with traders saying that contagion from the Greek banking sector to other European financials would be limited.

The pan-European FTSEurofirst 300 index finished up 0.2 percent at 1,504.86 points, with the Euro STOXX 50 also up 0.2 percent.

Top riser was Danish jewellery maker and retailer Pandora , which rose 16.9 percent after it reported a fourth-quarter operating profit above expectations and said its profit margin would rise in 2015.

French telecom firm Orange, which hit a four-year high on Monday, fell 1.7 percent after predicting operating profit would fall slightly in 2015 amid continued tough competition in its key home market of France.

Dutch logistics company TNT Express warned on Tuesday that it expected adverse trading conditions to continue in its main western European markets this year after reporting a fourth-quarter net loss, sending its shares down 9.8 percent.

In all, of the 35 percent of STOXX Europe companies to have reported earnings so far, 58 percent have beaten or met expectations.