Stocks Close Down Despite Improvement in Factory Data
European shares closed near session lows on Monday on profit-taking despite better-than-expected euro zone manufacturing data.
The FTSEurofirst 300 Index closed down 0.61 percent as investors remained nervous over fears that the U.S. Federal Reserve will start curtailing its stimulus measures.
In a sign that investors were switching away from the recent risk-on rally that has helped push global stocks to record highs, the safe-haven yen, strengthened against the dollar and Japanese stock futures dropped.
"I think the over-exuberance is coming to an end," Ronnie Chopra, head of strategy at Tradenext told CNBC, adding it was time to take money off the table.
Earlier, Europe stocks briefly traded higher on better-than-expected manufacturing data for several euro zone countries, but then dipped back into the red.
For Spain, the figure was well ahead of expectations, showing a rise to 48.1 against a 45.5 estimate. France's figure climbed to 46.4 against a 45.5 estimates. Germany's was 49.4, edging closer to the 50-point mark that represents expansion, against an estimate of 49.0. For the bloc as a whole the number rose to 48.3, above expectations of 47.8. In the U.K, the same manufacturing index rose to 51.3 for May, above expectations for a 50.2 rise.
In Turkey, Istanbul's stock exchange fell sharply on Monday as investors reacted with concern to anti-government protests which entered a fourth day. Shares closed down 10.5 percent.
In comments that were likely to dampen expectations of a further interest rate cut by the ECB when it meets on Thursday, Mario Draghi, said on Sunday that the euro zone economy was on track to recover later this year.
"The economic situation in the euro area remains challenging but there are a few signs of a possible stabilization, and our baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year," Draghi said in a speech prepared for the International Monetary Conference in Shanghai.
Meanwhile, the Nikkei in Japan hit a new six-week low on Monday, down 3.7 percent, accentuated by worries of a slowdown in China with weak factory gate figures for May.
In other news, British bank Barclays has been dragged into an international money laundering investigation after U.S. prosecutors discovered that Arthur Budovsky, the founder of digital currency exchange Liberty Reserve, held an account with the bank, Reuters reported on Sunday. Shares in the U.K. bank were 0.92 percent lower.
(Read More: Turkish Stocks Slide as Protests Enter Fourth Day)
In stocks news, French car registrations were released showing a continued decline. The autos sector was the worst performing sector in Europe at the open on Monday, but later turned positive.
Shares of Russian gold producer Polymetal climbed by 3.4103 in morning after JPMorgan raised its outlook to "overweight".
Shares of Finnish pharmaceutical company Orion were 3.15 percent lower as it revealed cost cutting plans, with 60 employees due to leave their positions.