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European shares retreated slightly from 15-month highs on Monday with lower crude prices weighing on oil stocks and Deutsche Bank dragging banks lower one day before the start of its 8 billion-euro cash call.
The pan-European STOXX 600 index fell 0.2 per cent by 1012 GMT after hitting its highest level since December 2015 last week in a rally driven by better economic data, good company earnings and merger and acquisition activity.
But caution prevailed on Monday after the leaders of the world's biggest economies dropped a pledge to keep global trade free and open, acquiescing to an increasingly protectionist United States after a two-day meeting failed to yield a compromise.
In spite of the prudent mood some investors said they remained upbeat about prospects for equity markets.
“Overall sentiment is neutral to positive,” Markus Huber, trader at City of London Markets said.
“However, more positive data or news will be needed in order for markets to be able to post the next leg higher and for traders be willing to take on more risk.”
The oil and gas index was the biggest sectoral loser on Monday, down 1.2 per cent, as crude prices fell on rising US drilling activity and steady supplies from OPEC countries.
The biggest drags on the index were oil majors Total BP and Eni, which fell between 0.8 and 1.1 per cent.
Banks were also under pressure.
Deutsche Bank fell 2 per cent after the German lender disclosed terms of its 8 billion euro cash call, its fourth capital increase since 2010. The recapitalisation, aimed at funding a strategy overhaul, will start on Tuesday.
A 1.3 per cent drop in UBS shares also weighed on the sector. The Swiss bank said it and its French subsidiary faced a trial in France over a tax case after authorities laid out charges against the pair.
Elsewhere, Vodafone shares added 0.2 per cent on news that Vodafone and India's Idea Cellular had agreed to merge their Indian operations.
“Shares are virtually unmoved on the announcement ... as investors wait for what's expected to be a fairly downbeat set of annual results in May,” said Neil Wilson, senior market analyst at ETX Capital.
Ingenico rose as much as 4.5 per cent before turning lower by 3 per cent after Atos formally denied a report it was preparing an offer for the French payments company.
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