European markets closed lower on Monday amidst political uncertainty in Italy and revived hopes of an OPEC production cut after a volatile trading day.
European markets
The pan-European STOXX 600 ended 0.77 percent down with almost all sectors in negative territory.
The banking sector was the worst performing, down over 1.8 percent at the close. Investors appeared to be harboring growing concerns as to the ramifications for Italy's already fragile banking system if citizens reject constitutional reform in the upcoming referendum.
Meanwhile in the U.S., the Dow Jones industrial average was lower on Monday on the back of record highs the previous trading week.
Italy in focus
Investors are increasingly worried over the upcoming referendum in Italy that could potentially lead to the fall of the Italian government and raise possible concerns over the recapitalization of the banking system.
Unicredit was closed lower after Barclays cut its price target for the stock. Spain's Banco Popular was in negative territory after Credit Suisse cut its price target on the stock.
European Central Bank (ECB) chief Mario Draghi addressed an EU parliamentary committee on Monday to reassure investors concerned regarding Italy's public debt levels.
"The Italian debt is sustainable," Draghi said in his opening statement.
"That does not mean there is room for complacency," he added.
Hopes of OPEC deal fade
Meanwhile, oil prices gained more than 2 percent on Monday after a choppy start to the day. Iraq's oil minister said the country would co-operate with OPEC members to reach an agreement without giving further details. OPEC members are holding bilateral meetings as they try to reach an agreement at a general meeting on Wednesday around a potential production cut.
Libya's National Oil Corporation (NOC) said on Sunday it would not take part in any OPEC production cuts for the "foreseeable future", according to Reuters, and the Saudi Arabian Energy Minister Khalid al-Falih also said that he believed the oil market would balance itself next year even if producers did not intervene.
Brent crude recovered from earlier losses to trade around $48.37 a barrel, up 2.37 percent at the European close, while WTI crude was selling at $47.15 a barrel, up 2.39 percent.
Aberdeen shares rally
In corporate news, Aberdeen Asset Management reported a 28 percent drop in pretax profit for the full year to the end of September. The company reported net outflows of £32.8 billion ($41 billion) but said that the value of its assets under management rose 10 percent despite the outflows. This gave investors optimism sending shares sharply higher however the firm ended 3.9 percent lower.
Meanwhile, London-listed asset manager Man Group closed trading near the bottom of the STOXX 600 after Exane BNP Paribas cut its price target on the stock by 20 percent.
Dollar pullback helps miners
Basic resource stocks closed as one of two stocks in positive territory on Monday, alongside utilities, as the dollar index – which tracks the greenback against a basket of currencies – pulled back as the "Trumpflation" trade seen of late suffered a setback.
This led to a rise in the price of gold helping push precious metal miners Fresnillo and Randgold Resources higher. Other metals were also ended trading higher giving a boost to the broader mining sector.