European shares fell on Monday, with energy firms on the back foot as crude oil prices retreated, but losses were limited by gains in banks as fears over a U.S. plan to curb risk-taking subsided.
By 0935 GMT, the pan-European FTSEurofirst 300 index shed 0.1 percent at 1,023.76 points, on track for the fourth-straight session of losses after closing at a five-week low on Friday.
Oil and gas producers were among the biggest decliners, as crude prices fell close to one-month lows near $74 a barrel. BG Group, BP, Royal Dutch Shell and Total lost 0.4 to 0.8 percent.
Losses in Europe mirrored weakness on Wall Street where U.S. stocks suffering their worst three-day slide in 10 months on Friday on fears over U.S. President Barack Obama's plans to restrict banks' risk-taking.
Banks, which had been weak in early trade, featured among the top gainers, with traders sceptical over the impact of the plan on the European sector.
Barclays, HSBC, BNP Paribas, Societe Generale and Deutsche Bank gained 0.3 to 1.7 percent.
"It was a bit of an overreaction and some sense is now coming back into the market. There is going to be a lot of nervousness and waiting until we know the full plans," said Philip Gillett, a trader at IG index.
"The general consensus is that this correction has been overdue for a while and we're going to move sideways for quite a while until we see clearer plans of how things are going to pan out."
Among individual movers, the world's biggest mobile networks maker Ericsson lost 2.5 percent after it posted lower-than-expected sales for the fourth quarter.
Rivals Alcatel-Lucent and Nokia both shed 0.9 percent. Shares in tech firms were also impacted by Google Inc, which posted revenue growth that lagged some of Wall Street's most bullish expectations, although its profit was higher than expected.
But Philips Electronics advanced 5.2 percent after the Dutch conglomerate reported a bigger-than-expected operating profit.
Across Europe, Britain's FTSE 100 was up 0.2 percent, while Germany's DAX and France's CAC 40 lost 0.5 and 0.2 percent.
MINERS STRONG
Shares in mining companies gained as metals prices edged off earlier lows.
Anglo American, BHP Billiton, Kazakhmys, Xstrata and Rio Tinto added 0.4 to 1.4 percent.
But pharmaceutical firms fell, with AstraZeneca, GlaxoSmithKline and Sanofi-Aventis down 0.6 to 0.9 percent.
Later in the session, investors will watch U.S. home sales for December, at 1500 GMT, for clues on the timing of the economic recovery in the country. Analysts polled by Reuters expect the numbers to show a 10 percent drop after rising 7.4 percent in the previous month.
