The pan-European Stoxx 600 closed the day 0.49 percent lower Monday.
Chemicals stocks were among the best performers, up by 0.24 percent. This followed the news in Germany the chairman of the industrial gas group Linde is ready to use his voting powers to approve a $65 billion merger with the U.S. rival Praxair.
Basic resources stocks were also higher after manufacturing data over the weekend showed a healthy expansion in China. The sector was up by 0.09 percent.
Meanwhile, banking stocks were down by 1.35 percent. Spain's Banco Popular said that internal audits showed the need for some adjustment in previous accounts. The bank also said the adjustments do not affect the statements in a "significant" way. Its shares were at the bottom of the European benchmark, down by 10.4 percent.
In the U.K., the government said it has cut its stake in Lloyd's Banking group to 1.97 percent. The government has recovered £20 billion of the £20.3 billion that taxpayers paid to rescue the bank in the financial crisis. Its shares were marginally higher.
The British chip-designer Imagination Technologies sank 71 percent at its lowest point Monday after Apple announced that it will stop using its graphics. It closed the day down 61 percent.
Also in the U.K., Reckitt Benckiser, the British consumer goods firm, is looking at a possible sale of its foods business to support its $16.6 billion takeover of baby food maker Mead Johnson.
"French's Food is a truly fantastic business with great brands, people and a history of outperformance. It is nevertheless non core to RB. We have therefore decided to initiate a strategic review of Food where we will explore all options for this great business," Reckitt Benckiser said in a statement. Its shares were 0.41 percent lower by close of play.
The luxury fashion brand Burberry announced Monday that it is teaming up with Coty, one of the world's leading beauty companies, to grow its presence in the global beauty market. Its shares moved 0.75 percent higher.