LONDON Feb 4 European shares suffered steep falls on Monday as mounting political uncertainty in the peripheral euro zone prompted investors to lock in profits on indexes trading close to multi-year highs.
The FTSEurofirst 300 provisionally ended down 1.4 percent at 1,151.73 points, its lowest close since Dec. 31, having hit a near two-year peak of 1,178.55 points towards the end of January in a rally that saw it rise nearly 8 percent from a November trough.
A corruption scandal in Spain and polls showing Italy's former prime minister Silvio Berlusconi regaining ground ahead of elections this month triggered fresh concern over the potential hit to euro zone stability and growth.
That pushed peripheral bond yields higher and prompted some heavy profit taking on euro zone banks, down 4.8 percent, Spain's IBEX, off 3.9 percent, and Italy's FTSE MIB, down 4.5 percent.
Yves Maillot, head of European equities at Natixis Asset Management, which has 286.5 billion euros ($392.4 billion) of assets under management, said the fall should be viewed as a pause rather than the start of a serious sell-off, and was therefore a buying opportunity.
"For many weeks now we've had very positive performances so that's the reason why we maybe need a correction in the very short term," he said.
Our top photos from the past week.