- US not going to war with Syria, says Kerry
- China and Japan data beats forecasts
- US traders invest in Europe market
- Osborne points to UK recovery
FTSE 100: -0.42%
CAC 40: -0.41%
FTSE MIBL 0.20%
IBEX 35: -0.60%
Stoxx 6000: -0.30%
European stocks were little changed as investors speculated on a US vote this week on military action against Syria.
US Secretary of State John Kerry on Monday said the US was "not going to war" with Syria but was planning a "very limited, very targeted, very short-term" strike after arriving in London for talks with British Foreign Secretary William Hague.
The US has urged Syrian President Bashar al Assad to hand over his chemical weapons after allegedly using them against civilians on August 21st.
President Barack Obama has proposed force against Assad's regime which will be put to Congress to vote this week. Lawmakers will start debating the issue on Monday.
Kerry's remarks came as Russian Foreign Minister Sergei Lavrov warned Western leaders that any military strikes would cause an "outburst of terrorism" in the region.
Russian President Vladimir Putin said he would back Syria against any strike during the Group of 20 (G20) summit last week after which Assad thanked the leader.
"Traders are fearful of the implications of the military intervention by the US, particularly after Putin warned that a Western strike could be met with retaliation as he continues to support Syria financially and strategically," said Ishaq Siddiqi, Market Strategist at ETX Capital.
Also weighing heavy on markets is the potential tapering of monetary stimulus at the US Federal Reserve's policy meeting on September 17th to 18th.
Jobs data last week prompted economists to readjust their forecasts for the Fed's trimming of quantitative easing at the meeting.
US non-farm payrolls data missed expectations, with employers adding 169,000 workers in August. Yet, the unemployment rate fell to 7.3% last month from 7.4% in July.
Chinese exports increase, Japan revises growth data
The release of better than expected data from China and Japan did little to boost stocks on Monday.
China's exports rose 7.2% in August from a year earlier, the General Administration of Customs revealed, beating the 5.5% estimate.
The report added to hopes that the world's second largest economy may be recovering from its recent weakness.
Japan revised its growth data for the three months through June to show a 0.9% expansion compared to the previous quarter or at 3.8% on annual basis. It follows aggressive measures by the world's third-biggest economy in recent months to bolster recovery.
US invests in European market
US traders have invested $65bn in the European market in the first half of the year, the most in 36 years, according to research from Goldman Sach's European strategy team.
The investments, which come from pension funds and other US groups, show confidence in Europe's recovery following a batch of positive economic data.
Chief Investment Officer of international equity at Goldman Sachs Asset Management, Eddie Perkins, said: "The economic story makes Europe a good bet. We expect European equities to keep rising as the continent recovers."
The European Central Bank last week improved its outlook for the Eurozone economy this year. The Bank expects the region to shrink 0.4% compared to its previous forecast in June of a 0.6% contraction.
Osborne says UK economy turning corner
Chancellor George Osborne said the UK economy is turning a corner, citing signs of a "tentative balanced, broad based and sustainable recovery".
He pointed to recent positive economic data as he said the country was in the early stages of a rebound.
Revised gross domestic product figures showed the UK economy grew by 0.7% in the second quarter of the year.
"Of course, many risks remain," Osborne said in a speech. "These are still the early stages of recovery. But we mustn't go back to square one. We mustn't lose what the British people have achieved."
Suntory to buy GSK's Lucozade and Ribena
GlaxoSmithKline's stock fell following reports Suntory Beverage & Food has agreed to buy the company's drink brands Lucozade and Ribena for £1.3bn.
BG Group slumped after cutting its 2014 production forecast due to unrest in Egypt, a delay in first production from the Knarr project in Norway and lower volumes from the US.
Vivendi rallied after Director Vincent Bolloré said he would be willing to become Chief Executive Officer of the French multinational mass media and telecommunication company.
Munich Re advanced after the Bank of America upgraded the world's biggest reinsurer from 'neutral' to 'buy'.
Oil slides, euro rises against dollar
Brent crude futures slipped $0.650 to $115.370 per barrel on the ICE.
The euro climbed 0.10% to the 1.3191 US dollar.