European equities fell in morning trading on Monday, as weaker oil stocks on concerns over Chinese demand for energy overshadowed rebounds in banking and mining shares.
By 0945 GMT, the pan-European FTSEurofirst 300 index was down 0.3 percent at 1,008.34 points after gaining 1 percent on Friday.
In January, the index suffered its worst monthly loss since February 2009, knocked lower by mounting worries over Greece's debt woes and the prospect of more regulation on the banking system.
"The market is just worried about the things that have been going on over the past few weeks," said Bernard McAlinden, market strategist at NCB Stockbrokers.
"There is apprehension about the possibility of tightening (in China) and problems of the peripheral economies in the euro zone."
On the macro front, China's manufacturing powered ahead in January, providing more evidence of its robust economic health to markets.
But Beijing's moves last month to rein in rapid growth and curb inflationary pressures have sparked fears that such measures could impede a still-weak global economic recovery and curb Chinese demand for energy and commodities.
Oil stocks slipped, with BG Group, Royal Dutch Shell and Total falling 0.5 to 1 percent.
Across Europe, the FTSE 100 index rose 0.2 percent, Germany's DAX gained 0.1 percent and France's CAC 40 fell 0.1 percent.
MINERS, BANKS REBOUND
Miners reversed earlier losses. Xstrata rose 0.6 percent after it posted an 11 percent rise in annual output of coal, its most profitable product.
Anglo American, Antofagasta and Eurasian Natural Resources Corporation gained 0.8 to 1.9 percent.
Banks also rebounded, with Barclays, Banco Santander and Deutsche Bank up 1.3 to 1.9 percent.
But, UBS fell 2.3 percent after the Swiss justice minister said the economy would suffer if the Swiss bank collapsed as a result of its unresolved U.S. tax dispute.
Among individual stocks, Tenaris lost 3.6 percent. The company is expected to post a 30 percent fall in 2009 revenues to $8.2 billion and a 40 percent fall in EBITDA to $2.3 billion, Il Sole 24 Ore said in its "Letter to the Investor" column on Sunday.
Vivendi fell 3.2 percent after the French media and telecommunications giant was found guilty of misleading investors by a U.S. jury on Friday.
On the upside, Irish airline Ryanair rose 5.7 percent as the company increased its profit forecast for the year after posting a narrower-than-expected third-quarter net loss.
In macro news, U.S. December personal income and personal consumption numbers are scheduled for release at 1330 GMT, and U.S. December construction spending and January's U.S. ISM report are both due out at 1500 GMT.
