European stocks fluctuated on Monday to close slightly lower, as investors struggled to shake off concerns surrounding the persistent low oil prices and the poor performance in European banks.
The pan-European STOXX 600 closed down some 0.4 percent, after volatility in Asia markets weighed on sentiment. Major European bourses all closed lower, with sectors finishing mixed.
European markets
Markets have suffered one of the worst starts to the year on record, with European stocks slumping to their lowest level since mid-December 2014 on Friday amid investor fears of the strength of the global economy.
"Markets have been trading in a volatile range and I expect that to continue, but I don't think we are on the edge of a bear market," head of fund research at Brewin Dolphin, Ben Gutteridge told CNBC.
Europe's main movers
Italy's FTSE MIB was one of the worst performing indexes in Europe, off 2.6 percent, after Italian banks suffered sharp losses. Traders cited news over the weekend that the European Central Bank was looking into a number of euro zone banks about non-performing loans, as the central bank looks to increase its efforts in tackling the region's mountain of bad debt, Reuters reported.
Banca Monte dei Paschi di Siena (BMPS), Banco Popolare and Unicredit were among the worst performers who posted sharp losses of 5 percent of more. BMPS slipped over 14.5 percent, while Portuguese banks also under-performed, weighing on the country's index, which finished 3.7 percent down.
In other individual stocks news, French supermarket Casino was one of the worst performers, slumping over 8 percent after ratings agency Standard & Poor's threatened to cut its debt to junk status.
Meanwhile, telecoms group Ericsson rallied almost 3 percent after its stock was upgraded to "buy" by Nordea Markets.
German sportswear firm, Adidas saw shares jump over 6 percent after it named Henkel's Kasper Rorsted as the company's new chief executive, replacing Herbert Hainer, who had come under fire for losing market share to Nike and suffering a fall in golf sales, Reuters reported. Henkel shares slumped to close over 4 percent down following the announcement.
Iran weighs on oil markets
Oil prices fell as much as 4 percent on Monday, with international benchmark Brent futures falling below $28 per barrel to touch their lowest level since 2003. Oil markets are preparing for Iranian exports after international sanctions on the country were lifted over the weekend.
Iran, which is an OPEC member, is ready to increase its crude oil exports by half a million barrels a day, Reuters reported on Sunday, citing statements from the country's deputy oil minister.
This has caused the market to panic, despite the fact that oil investors had anticipated the return of Iran to oil markets and that development of the oil industry in the country was likely to be a slow process, said American Enterprise Institute's resident fellow, Matthew McInnis.
Around Europe's close, U.S. crude was trading over 1 percent lower at $28.98 a barrel, after falling 3.6 percent to hit the session's low of $28.36 barrel, while internationally traded Brent crude was last seen below at $28.61, after falling 4.4 percent to $27.67 a barrel.
Despite the renewed slip in oil prices, oil and gas stocks had a mixed performance. Total and BP posted strong gains by the close, however, Tullow Oil was off some 3 percent. A handful of miners were also performing well, including ArcelorMittal, up some 3.1 percent.
Markets in Asia closed mostly lower Monday, on the back of another Wall Street sell-off Friday. Major indexes in Australia and Japan were nearing bear market territory, down over 18 percent from their 52-week closing highs.
Chinese markets wavered between gains and losses in a volatile session. The Shanghai composite closed up 0.47 percent, at 2,914.48 after falling as much as 1.84 percent earlier in the session.
U.S. stock markets are closed Monday for Martin Luther King Day. U.S. stocks closed sharply lower Friday ahead of a long weekend and the onslaught of earnings season, after a slew of disappointing U.S. data, a plunge in oil to below $30 a barrel.