European markets finished lower on Monday, as another fall in China's factory activity and a slide in oil prices troubled investors.
The pan-European STOXX 600 came off session lows, ending 0.2 percent down.
London's FTSE 100 ended down 0.4 percent, while France's CAC slipped 0.6 percent and Germany's DAX was down 0.4 percent by the close.
European markets
An official survey released on Monday showed China's factory sector contracted for the sixth straight month in January. The official manufacturing purchasing manager's index (PMI) came in at 49.4 in January, marginally missing a Reuters estimate for 49.6. A reading below 50 indicates a contraction in activities.
Asia markets ended mixed, with markets in Greater China falling into negative territory following the survey. However, major indexes in Australia, Japan and South Korea extended gains, boosted by the Bank of Japan's surprise move into negative interest rates on Friday.
U.S. stocks traded slightly lower Monday as investors showed concern over manufacturing data and oil.
Oil prices slipped following China's data and after an OPEC source played down any possibility of an emergency meeting. At 12 p.m. ET, Brent crude was down around 3.8 percent on the day at around $34.60 per barrel. U.S. WTI crude was down more than 5 percent on the day at around $31.90.
Several oil and gas stocks closed sharply lower on the oil price slump, including Seadrill, which ended down 5.5 percent.
Meanwhile Statoil said it had acquired a 15 percent stake in an exploration plot from Total in Uruguay, sending shares to close some 3.5 percent lower.
BT rallies
Earnings were in focus again for investors. Shares in BT finished up almost 2 percent after the company reported a 14 percent rise in adjusted profit before tax in the three months to December 31.
BT's boss hit back on Monday at a report by U.K. lawmakers suggesting the company should be forced to sell off its network and broadband infrastructure business.
"We've put forward a basket of measures and I think Ofcom need to consider that against the risk of separation, which will create huge instability problems across the whole of the market," BT chief executive, Gavin Patterson, told CNBC.
Budget airline Ryanair was a top performer, finishing 6 percent higher, after it announced an 800 million euro ($870.5 million) share buyback plan and reaffirmed its full-year net profit forecast at the upper end of its range.
Finland's Nokia settled a patent dispute with Samsung on Monday and predicted it would boost sales in its Nokia Technologies business to around 1.02 billion euros in 2015. But Nokia shares were hammered, finishing down more than 11 percent as traders were disappointed by the settlement.
The news also dragged French network infrastructure company Alcatel-Lucent, which finished off 11.5 percent, making it Europe's worst performing major stock.
Shares in Italian eyewear maker Luxottica close down 5.7 percent after the brand's third chief executive within 17 months left, fueling concerns over the group's strategy going forward.
Banks in focus
The banking sector was also in focus for investors, with the sector closing down some 1.5 percent.
Julius Baer reported that net profit under IFRS accounting standards fell by two thirds in 2015, largely due to provisions for penalties in a U.S. probe into tax evasion. Shares ended down some 2.7 percent.
Spain's reported a nearly 40 percent rise in 2015 net profit, which hit 1.04 billion euros ($1.13 billion) sending shares in the lender up as much as 7 percent, before paring gains to close up 2.2 percent.
Banco Popolare shares soared 6 percent, after the chief executive said over the weekend that a merger deal with Banca Popolare de Milano was expected soon, according to Reuters.
Meanwhile, Europe's largest lender, HSBC, is imposing a hiring and pay freeze across the bank globally in 2016, two sources familiar with the matter told Reuters. Shares closed more than 1.5 percent down.
Barclays and Credit Suisse said they would pay more than $150 million combined to settle charges that they misled investors over dark pool trading platforms. Shares of both companies fell by more than 2 percent lower.