Europe shares close mixed after contrasting data from Japan, China

European shares closed mixed on Monday, with financial services stocks posting the biggest declines, amid contrasting data from Japan and China.

The pan-European FTSEurofirst 300 Index provisionally closed up 0.1 percent at 1,230.19 points, after China's benchmark index hit a seven-week high.

The Shanghai Composite Index extended last week's winning streak on optimism that the world's second-largest economy may be stabilizing. This boosted investor sentiment in Europe, with stocks with Chinese exposure performing well.

Basic resources stocks closed up roughly 1.6 percent after the reassuring Chinese economic data last week, with stocks also helped by a report in the South China Morning Post saying that Beijing was quietly offering financial stimulus to key cities and provinces. Miner Fresnillo closed up 6.5 percent.

European shares have struggled to make much headway since the start of August as investors fret about a possible reduction of British and U.S. monetary stimulus in the coming months. U.K. blue chips are down 0.7 percent since the start of August, and the FTSE 100 closed down provisionally 0.1 percent on Monday.

U.S. stocks shrugged off their earlier losses Monday, boosted by techs, but major averages hovered around the flat line as investors struggled to find reasons to jump in amid disappointing data from Japan.

Second-quarter Japanese GDP came in at an annualized rate of 2.6 percent, lower than market forecasts of a 3.6 percent gain. The Nikkei lost nearly 1 percent on the news.

(Read More: Shanghai rallies over 2% to 7-week high on economic optimism)

In Europe, Greece's second-quarter growth data came in better-than-expected, with a contraction of 4.6 percent year-on-year. The numbers came ahead of euro zone GDP figures due on Wednesday. The data are expected to show the euro zone economy grew by 0.2 percent in the second quarter, according to a Reuters poll.

Euro zone banks need to shed 3.2 trillion euros ($4.26 trillion) in assets by 2018 to comply with banking regulatory framework Basel III, according to a report by the Royal Bank of Scotland. However, banking stocks were relatively untouched on Monday morning, with the sector trading only slightly lower on the news.

(Read More: Euro zone banks need to shed 3.2 trillion euros)

In stocks news, shares of Prudential closed up around 4.05 percent after the insurance giant reported a 22 percent rise in first-half operating profit to £1.42 billion ($2.19 billion) in the first half of 2013.

Airline EasyJet and IAG were two of the day's biggest fallers, closing 3.5 and 3.49 percent respectively. Another airline, Ryanair, was down 4.54 percent after a survey of Ryanair pilots found concerns about the low-cost carrier's safety culture, and support for an inquiry by regulators. The company has moved to discredit the survey.

Shares of Delta Lloyd rose by 2.08 percent after the Dutch financial firm was raised to "outperform" by Credit Suisse, while shares of U.K. betting firm Ladbrokes fell 2.61 percent after JPMorgan downgraded it to "underweight" from "neutral".

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