The major European indexes ended firmly in the red Monday, despite a positive start to the trading session, as financial, basic resources and auto-maker stocks fell sharply.
The U.S. stock market opened lower as Goldman Sachs analysts said they expect Citigroup to suffer a $15 billion write off over the next two quarters. Asian stocks closed largely in the red on U.S. economic concerns.
In London, Northern Rock was the worst performer on the FTSE-100, closing 20.4 percent in the red, as the troubled mortgage lender's future remained uncertain.
The U.K. government is open to any measure to help the ailing bank as long as its customers and financial stability are not jeopardized, Finance Minister Alistair Darling said on Monday.
Meanwhile, shares of Swiss Re fell 10.3 percent as the reinsurer reported a $1.07 billion writedown due to subprime-related losses. The Swiss benchmark index closed 2.5 percent lower.
On the mergers and acquisitions front, shares of British medical devices firm Gyrus Group jumped 51.8 percent after it received a $1.92 billion bid proposal from Japan's Olympus.