Europe close: Stocks knocked lower by Trump rhetoric

European stocks were in the red after Donald Trump moved to pull the US out of the Trans Pacific trade deal and announced he would levy "a very major" border tax on companies choosing to move overseas.

The benchmark Stoxx Europe 600 fell 0.43%, Germany’s Dax lost 0.73% and France’s CAC 40 gave back 0.60% lower.

Oil prices pushed lower with West Texas Intermediate down 0.78% to $52.81 per barrel and Brent crude 0.42% lower at $55.26.

"It’s been a disappointing start to the week across the board today as European investors take a risk off position after Friday’s “America First” President Trump inauguration speech on Friday, as European markets decline across the board," said Michael Hewson, chief market analyst at CMC Markets UK.

"The narrow one dimensional focus of the new US President’s comments, as well as his first executive actions in looking to renegotiate NAFTA and pull out of the Trans Pacific Partnership (TPP) has raised concerns that he is placing greater importance on protectionist measures than his pledges to implement tax cuts and infrastructure spending."

Commenting on Trump´s mooted tax on foreign imports, strategists at JP Morgan told clients the impact on European firms might not be as bad as feared as domestic tax cuts and a stronger US dollar would act as an offset.

"While it is true that manufacturing employment has declined, this shift is largely due to technological change, not trade. The evidence indicates that the current account deficit is not the main factor shaping manufacturing employment," analysts at HSBC chipped in.

To take note of, strategists at Citi upped their year-end 2017 target on the Stoxx 600 to 410.

On the corporate front, Italian insurer Generali racked up healthy gains following a report that Intesa Sanpaolo could take a stake in the company, possibly with Germany’s Allianz.

Housebuilder Bovis Homes rallied following a Sunday Times report that one of its larger shareholders has suggested Berkeley
Group may mount a bid for the company.

Dutch electronics company Philips Lighting dimmed after it said it plans to return up to €300m to its investors over the next two years through share disposals by its main shareholder Royal Philips.

Oil giant Royal Dutch Shell slipped as Saudi Basic Industries (Sabic) announced on Sunday that it has signed an agreement to acquire the 50% stake in the company that it doesn’t already own for $820m.

Paddy Power Betfair was in the red after saying it would not hit its top-end targets after Donald Trump's unexpected US election win and several other punter-friendly sporting results at the end of the year cost it around £40m. However, the FTSE 100 group said it still expected to make underlying earnings before interest, tax, depreciation and amortisation around the mid-point of its November guidance of £390-405m.

Essentra, a maker of cigarette filters and plastic packaging, was on the backfoot after it warned that it expects profit will be below expectations to a due to a more challenging than previously anticipated Health & Personal Care Packaging unit, which has been experiencing operational issues.

Insurer Admiral rose even after Deutsche Bank cut its stance on the stock to ‘sell’.