Europe's major stock indexes ended mixed Monday, despite trading higher throughout the morning session, following a weaker-than-expected rise in U.S. factory orders in December. The data pulled U.S. stocks lower and took the shine of a recent boom in merger and acquisition activity.
Microsoft's bid for Yahoo added to the early momentum in Europe and helped Asian stocks close firmly higher across the board.
Google reportedly offered to come to Yahoo's defense, with the online search specialist seeking to spoil Microsoft's $44.6 billion hostile bid for Yahoo.
Financials services remained in focus as a consortium led by Richard Branson's Virgin Group submitted a proposal to recapitalise and refinance the embattled British mortgage bankNorthern Rock. Luqman Arnold's investment group Olivant decided to pull out of the running.
French bank Societe Generale faced further pressure with investors waiting for a government report which is set to criticize its risk control and as an unrelated money-laundering trial starts. Shares were 4.8 percent lower.
In other corporate news, RyanAir missed forecasts, posting a 27 percent fall in third-quarter net profit and warned of further weakness in its fiscal year. Shares were 2.6 percent lower.
And UK pub owner Mitchells & Butler confirmed it has received an offer from rival Punch Taverns, which would give its shareholders up to $90 million in cash. Shares traded 3.6 percent higher.
Consolidation in the mining sector pushed basic resources stocks up, with Anglo American up 1.2 percent and BHP Billiton up 1.7 percent.
Shares in Rio Tinto ended 1.3 percent lower after Chinalco doused speculation that it was preparing to mount a counter bid to BHP Billiton for Rio Tinto, saying it would not increase its stake in the mining giant.
In the energy sector, shares of Denmark's Vestas, maker of wind turbines, gained more than 8 percent after it raised its full-year sales and profit outlook, saying development in the fourth quarter had been strong.
- Reuters contributed to this report