- Emerging market currencies weaken
- Draghi signals move towards QE
- Eurogroup finance ministers meet
- German Ifo business climate index rises
FTSE 100: -1.44%
CAC 40: -0.23%
FTSE MIB: -0.99%
IBEX 35: -0.85%
Stoxx 600: -0.83%
European stocks slipped on concerns surrounding weakening currencies in emerging markets.
The South African rand and Russian ruble fell, sending emerging-market currencies lower.
It comes as some analysts fear another round of monetary stimulus tapering by the US Federal Reserve could hamper the global economic recovery.
The Fed meets on Wednesday after last month deciding to start scaling back monthly asset purchases by $10bn to $75bn. Nonetheless, strategists at UBS were unfazed by the recent spate of volatility, telling clients that the current situation in emerging markets is not a 1990's style balance of payments crisis and that there are no risks of contagion.
The Turkish central bank said it would schedule an extraordinary policy meeting on Tuesday to evaluate recent developments and take necessary measures to ensure price stability.
The news comes after the lira endured its sharpest monthly decline for more than five years.
ECB's Draghi on QE, German Ifo
ECB European Central Bank (ECB) President Mario Draghi has signalled a possible move towards monetary stimulus to ward off deflation.
Draghi said the ECB would be prepared to buy packages of bank loans to households and companies, in stark contrast to traditional quantitative easing.
Speaking at the World Economic Forum in Davos, Switzerland, Draghi noted that the European Union treaty prohibits the ECB from buying government debt directly from member states under the usual QE.
Elsewhere in Europe, Eurogroup finance ministers are scheduled to meet this afternoon and the banking union will be on the agenda.
Eurogroup Chairman Jeroen Dijsselbloem on Saturday said he hopes this year's asset quality review and stress tests of European banks will reveal some bad news to give the process credibility.
Meanwhile, in Germany, the IFO business sentiment index - which measures firms' sentiment about the current business situation and their expectations for the next six months - rose to 110.6 from 109.5, coming in above the forecast for an increase to 110.0.
Later in the US, a report on new home sales is expected to show a 1.9% drop for December, compared to a 2.1% fall a month earlier.
Oil and gas producer BG Group tumbled after saying 2013 earnings would be lower than forecast due to reduced liquefied natural gas shipments from Egypt and US forward-gas prices.
declined after AT&T said it doesn't intend to make an offer for the mobile-phone operator.
RSA Insurance Group dropped after The Sunday Times reported it is considering scrapping its final dividend to raise £500m to fill a balance-sheet loss.
Ericsson gained as the network-equipment maker and Samsung Electronics settled their patent dispute and struck a new licensing deal for wireless technology in smartphones, televisions, tablets and Blu-Ray disk players.
Lanxess rallied after the chemical maker announced the appointment of Matthias Zachert as its new Chief Executive Officer.
The euro fell 0.03% to $1.3674.
Brent crude futures fell $0.616 to $107.220 per barrel, according to ICE data.