Stocks in most of Europe backpedaled late Monday as more cautious decisions were carried out by investors on the possibility of a trade agreement between the US and China, and a settlement for Britain to abandon the European Union.
With major financial institutions like BBVA and Banco Santander losing steam, the STOXX Europe 600 collapsed 0.78 percent in the last seven days to 388.58.
The German DAX fell to 12435.58 by 0.60 percent, the French CAC 40 plunged 5622.21 by 0.75 percent and the UK FTSE 100 fell 7216.71 by 0.41 percent.
US President Donald Trump announced on Friday a 'Phase I' agreement that will delay tariff increases, hike Chinese farm purchases, and tackle foreign currency issues. However, this agreement is only in theory, and not formalized in any form of the document.
Instead of an agreement, China described what both parties decided as "progress". According to market strategists at NBP Paribas, as the initial agreement points towards a possible improvement in a difficult business climate, investors see a possible breakdown as "negotiations shift to highly contentious issues."
Major banks in Europe, following Friday's run, have also calmed after EU negotiators said they would step up on talks to achieve a mutually-agreed proposition for Britain to leave the Union.
In banking, Lloyds Banking Group weakened 3.4 percent after a brief rally of around 13 percent late Friday while the Royal Bank of Scotland dipped 3.5 percent.
In mining, shares lost 2.4 percent, representing one of the key barometers of concern in the European sub-sector in general.
A Brexit deal was hanging in the balance late Monday after diplomats cautioned that the EU wanted more concessions from Prime Minister Boris Johnson and said it was unlikely in the next coming days that a full agreement would be reached.
Britain's domestic FTSE mid-caps were down by 0.56 percent after the 4 percent increase on Friday, while London's blue-chip stocks wrapped up the session by 0.45 percent.
Bank stocks were the biggest drag on the STOXX 600 index, retreating 0.79 percent, as Euro-Zone Bond output also declined as investors rushed into fixed-income or safe-haven assets.
Stocks of Swiss pharmaceutical companies Novartis AG and Roche Holding AG decreased by 0.3 percent and 0.7 percent, respectively, following a report proposing tariffs on Sweden's pharmaceutical products by the United States.
Automakers rallied 0.4 percent higher, stretching gains for a fourth straight day, while sectors deemed stable during times of economic instability such as real estate, transportation, and food and beverage, cushioned early losses.
