European shares accelerated losses to close lower on Monday, on ongoing concerns about an imminent scaling back of the U.S. Federal Reserve's asset purchases, plus liquidity fears in China.
The pan-European FTSEurofirst 300 Index closed 1.5 percent lower at 1,115.39 points on Monday, amid concerns about a severe strain in liquidity conditions in China. This was the index's lowest close since November 29 and it is now down 1.6 percent year-to-date.
(Read More: China's Credit Squeeze Deals Fresh Blow to Stocks)
Meanwhile, the Bank for International Settlements (BIS) said this weekend that it was time for central banks to exit their bond buying programs. In its annual report, the BIS said that central bank money had only "bought time" for policymakers.
(Read More: Stop 'Retarding' Economies With Loose Policy: BIS)
Several merger & acquisition discussions moved individual stocks on Monday. Shares in Germany's biggest cable company Kabel Deutschland closed around 1.66 percent higher after Britain's Vodafone confirmed it had decided to make a $14 billion takeover bid for the firm. This is the largest telecom-targeted deal by a European firm since Vimpelcom's $24.9 billion acquisition of Weather Investments in 2010.
(Read More: Vodafone Agrees Kabel Deutschland Deal)
Shares of Fiat closed about 3.80 percent higher because of ongoing reports that the firm will merger with its U.S. Chrysler unit, allowing the two to issue joint shares.