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The pan-European STOXX 600 index (STOXX) fell 1.3% by 0712 GMT, with technology stocks (SX8P) slumping 2.7%.
U.S. tech majors lost momentum on Monday after California shut bars, banned restaurant dining and other businesses to contain a surge of coronavirus infections, raising fears it may slow a U.S. economic recovery. (N)
Meanwhile, Washington on Monday rejected China’s disputed claims to offshore resources in the South China Sea, a move that Beijing criticised as inciting tensions in the region.
The latest skirmish dampened risk sentiment even as investors were hopeful that companies will surpass beaten-down earnings expectations with the reporting season underway.
German meal-kit delivery firm Hellofresh (DE:HFGG) gained 4.3% as it raised its full-year revenue forecast, while industrial technology group Hexagon (ST:HEXAb) jumped 5.9% after forecasting second-quarter profit above market expectations.
Norwegian oil firm Aker BP (OL:AKERBP) slipped 2.4% as crude prices fell, but the company beat second-quarter pre-tax profit expectations.