Europe close: Stocks drift lower amid mixed trading on Wall Street

At the beginning of a holiday-shortened week, European stocks wavered on Monday after a mixed start to trading on Wall Street.

The benchmark DJ Stoxx Europe 600 index was down 0.26% to 340.82 by the close of trading, Germany’s DAX slightly lower by 0.02% to hit 9,948.64 and France’s CAC 40 was 0.78% weaker to 4,427.80.

Stocks in Asia ended mostly higher, with the Shanghai Composite the standout gainer after Chinese policy makers loosened controls on margin lending.

Meanwhile, oil prices registered a small advance despite data from driller Baker Hughes on Friday showing US energy companies last week added one oil rig to 387 following three months of cuts.

West Texas Intermediate crude oil futures finished the session higher by 0.724% to $41.44 a barrel, but Brent crude was off lows, higher by just 0.6% to $41.43.

However, the Stoxx 600 oil and gas index retreated 1.51%, while the corresponding sub-index for basic resources was down 1.30% as three-month copper futures edged higher by 0.5% to reach $5,070 per metric tonne in LME trading.

Existing home sales in the US fell by 7.1% month-on-month in February to reach an annualise rate of 5.08m (consensus: 5.31m).

Hawkish remarks from Atlanta Fed president

Earlier in the day Richmond Fed president Jeffrey Lacker said he believed upside risks to price stability had increased perhaps "not significantly" but "I think noticeably and I think materially".

"We need to take that into consideration," he added.

To take note of, after the close of trading the president of the Federal Reserve bank of Atlanta, Dennis Lockhart, left the door open to another interest rate hike possibly as soon as the US central bank´s next meeting in April.

On a more positive note, European Central Bank governing council member Erkki Liikanen on Monday said the central bank had additional capacity to boost growth and inflation, including via further rate cuts.

In corporate news, Telecom Italia was in the black after it confirmed that chief executive Marco Patuano was set to leave the company following a seven -month power struggle with French corporate raider Vincent Bollore over the company´s strategy.

Bayer was also on the front foot after Reuters cited people familiar with the matter as saying that seed producer Monsanto had approached the company to express interest in its crop science unit, including a potential acquisition worth more than $30bn.

French insurer AXA was firmer after it said chairman and chief executive Henri de Castries will step down in September after nearly 17 years at the helm.

London-listed pharmaceuticals group Shire racked up solid gains as Exane BNP Paribas said the stock looked too cheap following its decline since the announcement of the Baxalta deal. The bank said it was selling its position in Roche and switching into Shire.