By ANDREA TRYPHONIDES And SARA SJOLIN
Novo Nordisk (NOVO-B.KO)
The Stoxx Europe 600 index closed down 0.6% at 285.62.
"Everyone's pausing for breath and wondering what the next catalyst is going to be," said Guy Foster, head of portfolio strategy, at Brewin Dolphin.
Investors' attention was on a meeting of euro-zone finance ministers in Brussels, where a proposed aid package for Cyprus was one of the key topics. Cyprus has large exposure to Greece's banking and financial sectors. Eurogroup Chief Jeroen Dijsselbloem said work will continue on drawing up an aid package for Cyprus but that no final decisions would be taken until March, after the country's general elections.
Novo Nordisk, the world's largest insulin maker, slumped after the U.S. Food and Drug Administration declined to approve its new-drug applications for insulin Tresiba and a related product, Ryzodeg. The FDA requested additional cardiovascular trial data, which Novo Nordisk doesn't expect to be able to provide during 2013.
The setback for Novo Nordisk helped French rival Sanofi (SAN.FR)
France's CAC 40 index closed nearly unchanged at 3650.58. Germany's DAX declined 0.2% to 7633.74. The U.K.'s FTSE 100 closed up 0.2% at 6277.06.
French stocks got a support after industrial-production data for the country came in slightly better than expected, while the U.K. market was helped by a rise in the mining sector.
Goldman Sachs (GS)
Investors also looked ahead to the Italian election on Feb. 24-25, as polling has been banned with less than 15 days to go. Former Prime Minister Silvio Berlusconi had in recent polls narrowed the gap with center-left politician Pier Luigi Bersani, leaving markets worried that a strong showing by Mr. Berlusconi's center-right coalition would derail Italy's reformist drive.
"If Bersani won, markets would initially be pleased that it's not a Berlusconi victory," said Mr. Foster of Brewin Dolphin. "But in the aftermath of the election markets could become volatile when they realize a Bersani government would be reluctant to bring about necessary reforms."
Italy's FTSE MIB index dropped 0.6% to 16529.87.
Investors were also keen to see whether there would be any comments about the euro at the finance ministers' meeting.
While France's finance minister raised concerns again about the strong value of the common currency, which can hurt European exporters, European Central Bank governing council member Jens Weidmann said Monday that the euro wasn't seriously overvalued and he warned politicians against meddling in the exchange rate. This sent the euro higher against the dollar. The euro was also helped by data from the Organization of Economic Cooperation which showed that economic growth is unlikely to slow further in the euro zone. The euro was at $1.3409 in midday New York trading, from $1.3372 late Friday.
Focus on the common currency will persist over the course of the week as a meeting of the Group of 20 nations in Moscow will likely focus on the theme of currency devaluations.
Shares in Dutch retailer Ahold advanced 3.8% after it sold its 60% stake in ICA AB, the largest supermarket operator in Sweden, for more than $3 billion.
French auto maker Peugeot (UG.FR)
Write to Andrea Tryphonides at firstname.lastname@example.org