Spanish election results hit stocks

The pan-European FTSEurofirst 300 traded slightly lower as liquidity was limited. The French CAC traded around 0.4 percent lower whileSpanish stocks fell over 1 percent in early trading afterruling People’s Party (PP) took a battering in regional and local elections on Sundayas voters punished Prime Minister Mariano Rajoy for four years of severe spending cuts and a string of corruption scandals.

In a test of the national mood ahead of general elections expected in November, the PP suffered its worst result in more than 20 years to herald an uncertain era of coalition as new parties rose to fragment the vote.

In individual stocks news, steel manufacturer Arcelormittal climbed to the top of benchmarks, rallying as much 1 percent after the firm signed a deal with the Steel Authority of India to set up an automotive steel manufacturing facility.

China is set to cut import tariffs on consumer goods including skincare products, Western-style clothes and nappies from next month, which could give a boost to domestic consumption in the country. Louis Vuitton parent group LVMH traded flat before turning 0.5 percent lower after the news, while cosmetics giant L’oreal fell around 0.7 percent, in line with the broader index.

However, risks regarding a potential Greek exit from the euro zone remained in the backdrop after the country’s interior minister, Nikos Voutsis, threatened to default on loan repayments due to the International Monetary Fund on Sunday.

Voutsis said pension and wage bills along with a payment to of around 1.6 billion euros due to the IMF in June could not both be paid, ahead of this week’s G7 meeting in Dresden, where European finance ministers will meet.

Talks kick off on Wednesday with Greece and its future in the euro zone likely to be high on the agenda. Greek Prime Minister Tsipras and president of the Eurogroup Jeroen Dijsselbloem will both speak at the EU parliament on Thursday.

Figures due on Friday from the United States that will almost certainly show the world’s biggest economy contracted last quarter are also likely to feature.

Data due this week includes the release of German and French consumer confidence readings, followed on Thursday by the Commission’s full business and consumer sentiment surveys for May.

Asian stocks shrugged off a dismal lead from Wall Street to open higher, with markets in Tokyo and Shanghai scoring fresh multi-year highs early Monday.

China’s benchmark Shanghai Composite surged to its highest level since January 2008 from the get-go. A weaker yen and a better-than-expected export data delivered a cheer to Japan’s Nikkei 225, which hit its highest level since June 2000.

Read MoreJapan’s April exports climb 8% on-year

Meanwhile, bourses in Hong Kong and South Korea are also closed for public holidays.

U.S. stocks closed lower on Friday, failing to hold highs touched during the session, as investors eyed inflation data and Fed Chair Yellen’s speech ahead of the long weekend.

Stocks moved little following an afternoon speech by Federal Reserve Chair Janet Yellen that said a rate hike would be appropriate this year if the economy improves. She noted that first-quarter weakness was largely transitory and that it would take several years for rates to return to normal.