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European stocks close lower as Brexit concerns bite

European stocks closed sharply lower on Monday amid a global selloff, as uncertainty over a possible "Brexit" and looming central bank meetings shook markets.

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The pan-European STOXX 600 index ended down 1.6 percent. The U.K.'s benchmark FTSE 100 provisionally closed 0.9 percent lower. It outperformed the French CAC 40 and the German DAX, which both closed unofficially 1.5 percent lower.

Several polls published on Friday and the weekend showed a small majority of Britons in favor of leaving the European Union (EU), ahead of a referendum on membership on June 23. This rattled global markets.

"The risk that the U.K. votes to leave the EU next week is the dominant force in the capital markets," BBH analysts led by March Chandler said in a note on Monday.

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Bank of England and Swiss National Bank policymakers will meet this week, but neither central bank is expected to announce policy changes.

The Bank of Japan's policy meeting on June 15 may be of more interest, with analysts saying the bank could announce additional easing measures.

Plus the U.S. Federal Open Market Committee begins its two-day meeting on Tuesday. Expectations for a June interest rate hike by the Fed have waned following a lower-than-expected May nonfarm payroll number in recent weeks that cast doubts on the health of the U.S. economy.

U.S. stocks opened slightly lower on Monday, following sharp declines in overseas markets, but received a boost from a 45 percent jump in LinkedIn shares on the news that the platform will be purchased by Microsoft.

Gold prices rose as investors put money into safe-haven assets. Precious metals miner Randgold Resources was one of a handful of companies in the black as a result.

Amid the negativity, some defensive stocks such as GSK also found support.

Adding to the grim mood in Europe was the weekend massacre in the U.S. at an Orlando nightclub that killed around 50 people. The shooter, Omar Mateen, was an employee of security firm G4S and shares in the U.K. security firm closed around 5 percent lower on Monday.

German insurance firm Hannover Re was sharply lower after Credit Suisse initiated coverage of the stock with an "underperform" rating. Credit Suisse put an "outperform" rating on Hiscox, sending shares in that insurance firm higher.

Shares of Nokia closed around 1.6 percent higher after the Finnish network equipment maker signed a 9.9 billion yuan ($1.5 billion) network infrastructure deal with China Mobile.

Satellite firm Inmarsat saw shares in the black after signing a deal with SpeedCast to roll out broadband on boats.

Banks under pressure

Banks in peripheral European countries were among the worst performers on Monday, dragged down by Italian lenders, which remain under scrutiny because of their heavy load of bad debts.

Banca Monte dei Paschi di Siena and Banca Popolare di Milano shares closed more than 9 percent lower.

Greek banks, which are among the most troubled lenders in the euro zone, were also deeply in the red. Alpha Bank closed down 6.9 percent, while Eurobank Ergasias was off by 6 percent.

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