Europe ends under pressure as commodities, China weighs

European stocks came under pressure to finish Monday's trading lower, as investors failed to shake off concerns over commodities and the continued sell-off in Chinese equities.


The pan-European STOXX 600 closed down 0.3 percent provisionally, in what has been a choppy day of trading. London's FTSE slipped 0.7 percent, while the French CAC and German DAX finished down 0.5 and 0.2 percent, respectively.

Russian assets fell on their first working day after the new year holidays. The Micex index closed down 3.8 percent.

China stocks plummet

On Monday, Chinese markets extended an already rough start to the year, with the Shanghai composite closing down 5.29 percent, while the Shenzhen Composite shed 6.6 percent. Last week, the Shanghai Composite lost all of its 2015 gains, falling by 9.97 percent in just five days.

On Monday, the People's Bank of China (PBOC) guided the yuan higher by setting the mid-point fix at 6.5626 against the dollar and removed the recently implemented circuit-breaker system to try and calm markets.

"European markets are not getting any room to breathe once again. This is despite the fact that the People's Bank of China is trying (out) all of its weapons to calm the market nerves," Naeem Aslam, chief market analyst at AvaTrade, said in a Monday note.

US oil hits new 12-year low

The China stock turmoil put pressure on commodity prices too, with copper — among other metals — sliding sharply, and the internationally-traded Brent crude futures was trading over 5 percent lower around Europe's close, at $31.77. U.S. crude hit a new 12-year low near Europe's close, last standing at $31.61.

In Basic Resources, Glencore sunk over 5 percent, with BHP Billiton and Rio Tinto also posting strong losses, however Anglo American closed in positive territory.

Several oil and gas stocks closed sharply lower, with Seadrill off 6.5 percent, while Statoil and Tullow Oil both closed more than 2.5 percent lower.

Shire buys Baxalta for $32B; Autos up

In individual company news, Shire agreed to acquire peer Baxalta for $32.2 billion. Shares in Shire slipped over 8 percent down.

Meanwhile, the chief executive of Volkswagen Matthias Müller has apologized over last year's emissions scandal during his first U.S. trip as boss. Mueller announced that the company, which was embroiled in the emissions scandals three months ago, would invest more money in the U.S. and create more jobs. The news sent Volkswagen shares 1.7 percent higher. Other autos got a boost from this, with Porsche up 2.3 percent and Renault above 1 percent.

Defense names BAE Systems and Thales got a boost after JPMorgan put an "overweight" outlook on both stocks, saying that it would be a "very good year" for European defense stocks due to rising geopolitical tensions. BAE Systems closed up 1.3 percent, while Thales was a top performer on the STOXX 600, finishing up 3.6 percent.

Air France-KLM finished up 1 percent despite reporting that December passenger traffic was down 1.1 percent on the year. French newspaperLes Echos, reported that the airline was set to unveil a new growth plan.

German genetic testing specialist Qiagen saw shares plummet over 11 percent after it said it had missed its own sales and profit targets last year.