European equities lower as Greferendum looms; IMF warns of deterioration in Greece's outlook

On Friday European stocks were lower, expected to lock in sizable losses for the week, as investors were nervous ahead of Sunday’s referendum over Greece’s bailout.

The Stoxx Europe 600 dipped 0.3% to 383.93, with no sectors trading higher. For the week, the pan-European index is facing a 3.2% fall, heading for its sharpest weekly pullback since early May.

The week is ending much as it began, with uncertainty about what’s next for Greece. Voters in the country on Sunday will be asked whether to accept the terms of a bailout agreement set out by its lenders.

Voting will be held between 7 a.m. and 7 p.m. local Greece time, or 12 a.m. to 12 p.m. Eastern Time on Sunday. Results are expected to come in about two to four hours afterward.

Greek Prime Minister Alexis Tsipras late Thursday urged a “no” vote, saying a rejection will bolster his chances of quickly securing a better deal.

“A rejection of the proposals would put Greece on course for an exit from the single currency. An acceptance would open up the doors for negotiation, but we have to remember that the proposal is also effectively null and void in itself, so it would be back to the drawing board,” said Simon Smith, chief economist at FXPro.

In the meantime, the IMF issued a new "preliminary draft" analysis of Greek finances which said there had been a deterioration in Greece's outlook since Prime Minister Alexis Tsipras and his anti-austerity, leftist Syriza party came to power at the beginning of 2015. Significant changes in policies and in the outlook since early this year have resulted in a substantial increase in financing needs, the draft said.

Warnings arose from the IMF report which had showed that Greece needed an extra 50 billion euros ($55 billion) over the next three years, with more than two-thirds to come from the EU. Since targets for the government's fiscal surplus had fallen, the analysis indicated there was a shortfall of another 13 billion euros.

"Greece faces significantly larger financing needs going forward than we thought last year," one senior IMF official told journalists.

EUR/USD was last at , versus 1.1086 late Thursday in New York.

Germany’s DAX lost 0.3% to 11,066.12. France’s CAC 40 fell 0.5% to 4,811.85.

The DAX and the CAC are facing weekly declines of 3.8% and 5%, respectively.

London's FTSE 100 dipped 0.4% at 6,606.20, heading for a 2.2% drop for the week.

Portugal’s PSI 20 dropped 1.3% lower to 5,544.88, and Spain’s IBEX 35 lost 0.7% to 10,770.60, approaching weekly declines of about 5% each.

Italy’s FTSE MIB dipped 0.3% to 22,554.94, nearing a 5.3% weekly fall.

Greek stock market has been closed all week. The country's bond prices dropped, pushing the yield on 10-year government debt higher 1.3 percentage point to 14.85%.