Europe close: Markets mixed as traders look to Fed

European stocks took a breather on Monday, after big gains in the previous week, with moderate losses for Chinese assets overnight affecting sentiment, as well as the US central bank´s policy meeting later in the week.

The benchmark Stoxx 600 was off by 0.54% to 353.45, while the Dax was down 0.28% to 11,171.78.

In Paris, the CAC 40 was marginally higher, adding 0.03% to 4,765.43, and the FTSE MIB was ahead by 0.42% to 18,370.32.

During the previous week, the Stoxx 600 had run up 4.72% - its best weekly tally since January 2015.

Italy was also in focus after the President named PD-Party foreign affairs minister Paolo Gentiloni as the new Prime Minister, charging him with the creation of a new government.

"Italy will provide the necessary distraction before the Fed rate decision on Wednesday, but with a 25bp rate increase in the US totally nailed on, markets may be excused for looking through the Fed and instead worrying about the recapitalisation of Italy’s banking system and the implications of the ECB’s QE revamp," strategists at SocGen said in a research note sent to clients.

On Monday, the Shanghai Composite in China lost 2.47% to 3,152.97, alongside a retreat in the yuan and in Chinese government bonds.

Traders cited poor liquidity ahead of the year-end as one factor behind the losses in China, together with remarks by US President-elect Donald Trump over the weekend around the 'One China' policy.

The US Federal Reserve was also expected to decide on another 25 basis point interest rate hike on Wednesday.

In corporate news, Allianz Renewable Energy announced it had bought a €330m portfolio of windparks from PNE Wind.

Deutsche Bank's asset management arm was planning to rejoin the group of the world’s top ten firms in that space, Welt am Sonntag cited division chief Nicolas Moreau as having said.

Moreau did not comment on rumours about an upcoming flotation of the unit.

Stada received expressions of interest from Mylan and Novartis, SonntagsZeitung reported.

Oil prices shot higher after non-OPEC producers agreed to reduce their output by 568,000 barrels a day alongside the cut announced by the oil cartel itself on 30 November.

Brent crude oil futures were last up 2.77% at $55.89, while West Texas Intermediate added 3% to $53.08 per barrel.