Eugene Hoshiko, Associated Press
A man touches on a statue of charging bull which is a similar version of his Wall Street Bull, on Tuesday Feb. 7, 2012 in Shanghai, China. Mainland Chinese shares lost ground Tuesday with the benchmark Shanghai Composite Index falling 1.68 percent, or 39.23 points, to 2,291.90 after dipping more than 2 percent earlier in the day.

LONDON — Stocks were trading lower on Tuesday as investors awaited the outcome of talks in Greece that could determine whether the debt-ridden country gets crucial bailout cash it needs to avoid bankruptcy.

With much of Greece coming to a standstill due to a general strike called against impending cutbacks, markets will be monitoring political leaders' talks in Athens, which are now expected to take place this evening.

Heads of the three parties backing the interim government will try to thrash out a deal on new austerity measures needed to get the vital bailout cash.

"With little data of consequence out in North America today, expect markets to trade on headlines coming out of Greece," said Benjamin Reitzes, an analyst at BMO Capital Markets.

In Europe, the FTSE 100 index of leading British shares was down 0.6 percent at 5,857 while Germany's DAX fell 0.9 percent to 6,702. The CAC-40 in France was 0.5 percent lower at 3,388.

In the U.S., the Dow Jones industrial average was down 0.4 percent at 12,798 while the broader Standard & Poor's 500 index fell an equivalent rate to 1,338.

The leaders will confer with Prime Minister Lucas Papademos on new income cuts and job losses, which Greece's eurozone partners and the International Monetary Fund are demanding to keep the country's rescue loans flowing. With a general election scheduled to take place within a few months, political leaders are fretting about the impact on their fortunes of signing up to a deal that imposes more hardship on Greece's population.

"No one in Greece wants to be seen to be tightening the austerity noose even tighter for fear of being punished at the polls," said Michael Hewson, markets analyst at CMC Markets.

Athens must placate its creditors to clinch a €130 billion ($170 billion) bailout deal from the eurozone and the IMF and avoid a March default on its bond repayments.

Without an injection of emergency money, Greece will likely default on its bond repayments on March 20 — an event that could shake European banks and other private lenders with Greek debt on their books.

Even though several deadlines have passed, the prevailing mood in the markets is that Greece will eventually reach a debt-reduction deal with its private creditors as well as the second bailout.

That's one of the reasons why markets have been more upbeat this year, especially compared with the febrile trading that marked 2011. Many stock indexes are at their highest levels in months, while the cost of borrowing for key euro countries, such as Italy and Spain, has eased to levels that are considered sustainable in the long-run.

The euro has been buoyant, too, trading another 0.4 percent higher at $1.3176.

The focus on Greece overshadowed a raft of corporate news which was mostly positive.

Mining company Xstrata PLC and commodities dealer Glencore International PLC agreed a $90 billion merger that will create the world's fourth largest natural resources company. The announcement of the terms of the deal comes just a few days after the revelation that the two companies were in discussions about a long-mooted tie-up.

Xstrata shares were down nearly 2 percent as investors had hoped the premium would be a little higher than the 15.2 percent that's on offer — one shareholder, Standard Life, has indicated it will vote against the deal.

BP PLC shares were flat even after it raised its quarterly dividend by 14 percent after posting double-digit gains in profit and revenue in the last three months of 2011 despite further big payments to compensate for a disastrous oil spill in the Gulf of Mexico.

Steel maker ArcelorMittal SA was faring better after voicing some cautious optimism about its near-term —prospects even after it reported a heavy fourth quarter loss generated by a deteriorating European economy and big tax and restructuring charges.

Earlier in Asia, the mood in the markets was subdued.

In mainland China, the benchmark Shanghai Composite Index fell 1.7 percent to 2,291.90 while the smaller Shenzhen Composite Index lost 1.7 percent to 869.87. Japan's Nikkei index fell 0.1 percent to 8,917.52 while Hong Kong's Hang Seng Index dropped the same rate to 20,699.19.