European equities eased on Monday, continuing the previous week's retreat from multi-month peaks and dragged down by a sharp selloff in Danish pharma group Novo Nordisk after its key drug suffered a regulatory approval set-back.
The weakness in European equities was fairly broad with all but two sectors in the red. and mining stocks were hit by falling commodity prices while continued political turbulence in Italy and Spain weighed on banks and on their national indexes.
The pan-European FTSEurofirst 300 provisionally closed down 0.7 percent, at 1,154.03 points, continuing a correction from 2-year highs set at the end of January which analysts said could have further to run in coming sessions.
"At this juncture we are not buying further equities," said James Butterfill, global head of equity strategy at Coutts. "Fundamentally we do like equities but at this juncture, from a technical short-term view ... we are being cautious."
Shares in Novo Nordisk plunged 13 percent, suffering their worst fall in four years after U.S. regulators requested additional tests on its key new insulin drug, potentially delaying the approval by several years and threatening the Danish firm's long-term financial targets.
"Ahold was dead money for 5 years, but it should start to see some momentum building from here," a senior trader in London said. "The consolidation will be complete once we get through the 2007 top."
On the downside, shares in Lundin Petroleum plummeted on Monday after appraisal work at a Norwegian oil field revealed that it contained less oil than initially expected.
The European earnings season has so far been mixed. With a quarter of it gone, 40 percent of companies in the that have reported have missed consensus estimates, Thomson Reuters Starmine data showed.
The state of the global monetary system and potential currency wars is on the agenda again, at the Eurogroup meeting of euro zone finance ministers on Monday. France said it will raise the issue of the strengthening euro at the meeting, and again on Friday, when the G20 finance ministers meet in Moscow, Russia.