European shares posted their biggest daily drop in two months on Monday, with most major markets including Germany and France slumping more than 2%, as a reimposition of U.S. metal tariffs on Brazil and Argentina triggered a decline in global sentiment.
After an upbeat November, its third straight month of gains, the pan-European STOXX 600 index closed down 1.6%, erasing session gains after positive factory activity data from China and major euro zone economies had earlier taken it to near four-year peaks.
Losses were broad-based with a 2.7% fall in utility stocks .SX6P leading declines, with Latin America-exposed Italian utility Enel (ENEI.MI) sliding 3.7%.
Steel and aluminum producers such as Norsk Hydro (NHY.OL) and ArcelorMittal (MT.AS) weighed on the materials sector, but it lost the least among major sectors as mining giants BHP (BHPB.L) and Rio Tinto (RIO.L) gained on higher iron ore and copper prices.
Rising oil prices limited slippage in the energy sector .SXEP to 0.8%, while other sectors gave up more than 1%.