Europe close: Stockmarkets track losses in the US

Stocks on the Continent came under renewed selling pressure on Monday as investors digested the heavy losses seen on Wall Street during the previous Friday amid a weakish start to the trading session in the US.

Acting as a backdrop for markets, in the run-up to the end of the year, investors around the world were waiting on policy decisions from several of the world's main central banks, including the US Federal Reserve, on Wednesday, and the Bank of England and Bank of Japan, both on the next day.

Indeed, several analysts came out on Monday regarding the former, cautioning that financial markets were telling the US central bank to stay put, while in parallel at one point during the session Fed funds futures were again pricing-in odds of just 70% that the Fed would in fact go ahead with a rate hike.

On that note, Chris Beauchamp at IG was telling clients: "European markets were unsteady throughout the morning, but it was US equities that stole the show in early trading on Wall Street, as the Dow Jones briefly tested the lows seen last May. But while another quick rebound took place, the feeling of bearishness persists. Markets will struggle to make much progress ahead of the Fed decision, but even after it there seems little to cheer investors, given slowing economic growth and the constant presence of trade wars.

By the end of trading, the benchmark Stoxx 600 was down by 1.18% or 4.09 points at 343.12, alongside a drop of 1.30% or 141.49 points to 10,724.28 for the German Dax while Paris's Cac-40 slid by 1.11% or 53.91 points to 4,799.79.

In parallel, the yield on the benchmark 10-year Italian government note edging up by two basis point to 2.96%, even as European Commission spokeswoman, Margaritis Schinas, said that talks between Brussels and the government in Rome were continuing apace.

Significantly, at the weekend Italy's Prime Minister, Giuseppe Conte, and the country's two deputy PMs, Matteo Salvini and Luigi di Maio, agreed to lower the target for the 2019 budget deficit from 2.4% to 2.04%.

Elsewhere on the economic front, Eurostat reported that on a harmonised basis the year-on-year rate of advance in consumer prices in the Eurozone retreated from 2.2% for October to just 1.9% in November (consensus: 2.0%), which was one tenth of a percentage point less than the preliminary reading.