European shares were lower in morning trade on Monday with investors still questioning equity valuations ahead of the latest earnings season and tensions in Ukraine escalating once again.
Tech sell-off continues
The Euro Stoxx 600 Index was lower with the technology sector continuing to lead the declines. The sector has weighed on global bourses in recent trading sessions with some big name stocks being hit on The Nasdaq Composite after a run-up in equity prices last year.
Shares of Ericsson fell 3.9 percent in morning trade with STMicro sinking 1.9 percent and Alcatel-Lucent falling 1.9 percent. A weak earnings report on Friday from JPMorgan prompted European bourses to extend their losses and investors will look to the other side of the Atlantic once again on Monday with rival bank Citigroup set to release its updated figures.
"Even if some investors weren't nervous about the beginning of earnings season before last week, they probably are now," Michael Hewson, a chief market analyst at CMC Markets said in a morning note. Hewson noted that expectations for Citigroup are likely to remain low given the bank's troubles with the Federal Reserve and regulators in the past few months.
Ukraine weighs
Events in Ukraine were back in focus for investors as the country's authorities gave an ultimatum to pro-Russian separatists in the east of the country.
Ukraine said it plans to launch a "full-scale anti-terrorist operation" involving the army against the rebels, according to Reuters, which cited acting president Oleksander Turchinov. This came after the separatists took control of the Ukrainian city of Slaviansk on Saturday.
This deadline expired at 6 a.m. GMT on Monday and raised the possibility of confrontation with Moscow following Russia's annexation of Crimea in March. In response, the United Nations Security Council met for an emergency meeting early on Monday to discuss the crisis.
Russian shares fell over 1.5 percent on the MIECX Index Monday and oil major BP - which owns a stake in Russia's Rosneft - slipped 1.3 percent.
Meanwhile, investors were weighing up a change in monetary policy in Europe with comments from two European Central Bank (ECB) officials over the weekend. President Mario Draghi said on Saturday that he would look to ease policy further if the strength in the euro persists. On Sunday, ECB Executive Board member Benoit Coeure said the central bank is ready to make asset purchases if this period of low inflation continues.
In Asia on Monday, equities started the week mixed following last week's declines on Wall Street.
Glencore shares rise
On the data front, a final reading for March inflation for Italy was confirmed at 0.4 percent (year-on-year). Euro zone industrial production numbers for February showed an expected uptick of 0.2 percent compared to the month before.
In stocks news, shares in fish farmer Marine Harvest jumped 3.4 percent after the company reported reported better-than-expected first-quarter earnings.
Glencore-Xstrata shares rose 1.7 percent after announcing that it had sold a Peruvian mine to a Chinese consortium for USD 5.9 billion.
Meanwhile, shares of Banca Pop Milano fell 6 percent after shareholders unexpectedly voted against a new governance reform.
GSK shares slipped 0.8 percent after the BBC reported that the pharmaceutical company is facing a criminal investigation in Poland on allegations of bribery.
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