European stocks drop as Greece holds crunch talks

European stocks slid Friday as traders awaited the outcome of a European summit and crunch talks between Greece and its creditors over the weekend.

London's benchmark FTSE 100 index dropped 0.77 percent to stand at 6,755.70 points in midday deals.

The CAC 40 in Paris edged down 0.08 percent to 5,037.86 points and Frankfurt's DAX 30 fell 0.30 percent to stand at 11,438.54 compared with Thursday's close.

Athens' main index dipped 0.11 percent to 780.82 points.

"Equities are in the red accelerating their sell-off from late yesterday as we move into what is being billed as the last weekend for Greece to present acceptable reforms," said Mike van Dulken, head of research at Accendo Markets.

"While another last-minute weekend agreement would surely mean a relief rally come Monday, continued stubbornness on both sides could equally take us into uncharted default/euro-exit territory and the accompanying uncertainty."

European Union leaders were meeting in Brussels on Friday and eurozone finance ministers were set to gather on Saturday for last-minute talks in a bid to save Athens from default.

The leaders of Germany and France warned Greece that it must reach a debt deal with its creditors at "decisive" talks on Saturday to avert default and a possible euro exit.

In foreign exchange, the euro edged down to $1.1203 from $1.1206 late in New York on Thursday.

Away from Greece, Britain's biggest retailer, supermarket group Tesco, shot to the top of London's FTSE after it reported improving numbers following a record annual loss.

"Although Tesco has seen (quarterly) sales drop by 1.3 percent this is better than expected and an improvement on last year's fall of 4.0 percent," noted Alastair McCaig, market analyst at IG trading group.

Tesco, whose shares rallied 3.35 percent to 225.05 pence in Friday trading, is seeking to overhaul its business after reporting the biggest annual loss in its almost 100-year history of £5.74 billion ($9.03 billion, 8.06 billion euros) in the year through February.

Britain's largest retailer is also facing a fraud probe after a huge accounting scandal that saw it overstate profits by £263 million due to errors stretching back to before 2013.

Meanwhile in Paris on Friday, shares in Air France-KLM rose 0.20 percent to 6.49 euros after its Air France unit denied a report that it was preparing to lay off 3,300 employees as part of continuing cost cutting at the French flag carrier.

An email sent by the company said Air France "formally denies information published in the press" Friday, when the Le Monde daily reported the airline was preparing "3,000 ground crew departures and 300 among pilots".

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