Europe's main stock markets fell Monday, as Turkish shares slumped on political uncertainty in the country following elections, offsetting support for the alcoholic drinks and banking sectors.
Markets were also tracking the latest developments surrounding Greece's standoff with the European Union over its bailout repayments, as well as comments out of the Group of Seven summit in Germany.
Frankfurt's DAX 30 index slid 0.67 percent to stand at 11,121.78 points in afternoon deals and the CAC 40 in Paris shed 0.82 percent to 4,880.41.
London's benchmark FTSE 100 dipped 0.08 percent to 6,799.16 points compared with Friday's close.
The euro rose to $1.1136 from $1.1115 late on Friday in New York. Profit taking set in after the dollar had rallied ahead of the weekend following robust US jobs data that increased the prospect of an interest rate rise from the Federal Reserve later this year.
A US official on Monday meanwhile disputed a French source's account that President Barack Obama had told his allies at a G7 summit the strong dollar posed a "problem".
Fears over Greece's finances have weakened the euro sharply in the last four months, with the single European currency trading at close to parity with the dollar in May.
- Turkish uncertainty -
Elsewhere, the Turkish lira plunged to a record low point against the dollar Monday, while Turkey's main stocks index was down by about 6.0 percent.
Turkey's central bank acted swiftly to give some support to the pressured Turkish lira, saying it was pruning its short term foreign exchange deposit rates effective Tuesday.
The Istanbul stock exchange's BIST 100 index plunged 6.20 percent while the Turkish lira lost 4.0 percent to trade at 2.76 to the dollar.
The lira earlier broke through the 2.8 lira level against the dollar for the first time.
Turkey's Islamic-rooted ruling party on Monday weighed its future strategy after losing its absolute parliament majority for the first time since winning power 13 years ago, in a stunning election setback for President Recep Tayyip Erdogan.
Greece meanwhile continued to be a central focus for markets. Germany's Finance Minister Wolfgang Schaeuble will meet Monday in Berlin with his Greek counterpart Yanis Varoufakis, amid contentious negotiations between Greece and its creditors.
"While Greece will inevitably continue to be the main story in the markets this week, there are plenty of other things that traders should not take their eye off including US retail sales on Thursday, large amounts of key data releases from China and Japan, and bond market volatility that could again ripple through the markets," said Craig Erlam, senior analyst at Oanda trading group.
- Diageo, Deutsche Bank surge -
On the corporate front, shares in alcoholic drinks giant Diageo jumped 6.76 percent to 1,879.50 pence in London on Monday on reports of a potential Brazilian takeover bid for the maker of Guinness stout and Foster's lager.
Brazilian newsweekly Veja reported that the nation's richest man, billionaire Jorge Paulo Lemann, and his partners in private equity firm 3G Capital were considering a bid for Diageo.
A Diageo spokesman declined to comment on the matter.
The banking sector was also in focus, with shares in Deutsche Bank surging 5.45 percent to 29.12 euros in Frankfurt, the day after its co-chief executives announced they were resigning as the banking group faces a wave of scandals and missed profit targets.
Germany's largest lender is mired in around 6,000 different litigation cases and was last month fined a record $2.5 billion (2.2 billion euros) for its involvement in the Libor interest rate-rigging scandal.
British banking titan HSBC was 0.31-percent higher at 620.80 pence, a day before it was expected to announce a fresh round of massive jobs cuts, according to local media reports.