European markets closed lower Monday afternoon as investors looked ahead to a trading week in which the Federal Reserve is likely to hike interest rates.
The pan-European Stoxx 600 closed down just over 1 percent Monday afternoon, with major bourses and all sectors bar travel and leisure in negative territory.
Basic resources stocks led the drop, closing 2.6 percent down after tumbling during afternoon trade amid heightened fears of a trade war. The topic is likely to be top of the agenda at a two-day G-20 meeting starting in Argentina later on Monday, with any sign of escalating tension between Washington and Beijing likely to make investors in Asia increasingly nervous. BHP Billiton, Anglo American and Glencore all closed lower by around 4 percent.
Technology also closed well into the red. Stocks closed 2.6 percent lower amid news of a trading update for British tech firm Micro Focus. The company said its CEO had quit amid ongoing problems with its recent purchase of Hewlett Packard Enterprise assets. Micro Focus also slashed its annual revenue forecast for 2018, prompting shares to plummet by 46 percent at the market close.
The oil and gas sector closed down by 2.15 percent.
Travel and leisure was the only sector to finish positively, up by 0.4 percent. It was boosted by U.K. bookmakers William Hill and Ladbrokes, which closed up 4.2 and 2.9 percent respectively. This came on the back of new regulations from the Gambling Commission that were less harsh than initially feared.
Looking at individual stocks, French shopping center operator Klepierre said Monday that it had made a proposal to buy U.K. peer Hammerson, Reuters reported. The British firm rejected the offer, meaning that shares closed 24 percent higher.
Barclays shares closed up by 3.6 percent percent after Sherborne acquired the voting rights of 5.16 percent of the British bank's issued share capital.
Federal Reserve in focus
The Nasdaq composite pulled back 2.2 percent as Facebook dropped 7.3 percent, on track for its biggest one-day drop in five years. The Dow Jones industrial average fell 310 points, with Caterpillar as the worst-performing stock in the index.
On Wednesday, the U.S. central bank is widely expected to raise interest rates to 1.75 percent, up from 1.5 percent. The Fed could also signal that as many as three more rate hikes may lie in store for the rest of the year.
Back in Europe, it was announced that the U.K. will remain within the European Union until the end of 2020, but with restricted powers. Negotiators from Britain and Europe are meeting in Brussels for Brexit talks ahead of an EU summit later in the week.