The composite index of the largest enterprises in the region Stoxx Europe 600 fell by 3.81% and amounted to 456.36 points.
The French CAC 40 index lost almost 4%, the German DAX - 3.8%, the British FTSE 100 - 2.6%. Spain's IBEX 35 and Italy's FTSE MIB were down 3.2% and 4%, respectively.
Dutch consumer goods and medical equipment maker Royal Philips NV fell 4.6%. The company in the 4th quarter of 2021 reduced net profit by 75%, revenue - by 6%, which turned out to be worse than expected.
French Kering, which owns several luxury brands, fell 3%. Kering will sell Sowind Group SA, which owns Swedish watchmakers Girard-Perregaux and Ulysse Nardin, to the company's top management.
Meanwhile, Unilever Plc rose 7.3% after The Wall Street Journal reported that hedge fund Trian Fund Management LP, led by billionaire Nelson Peltz, bought a stake in the company.
Bicycle maker Accell soared 25% on the news that the company was bought by a consortium of investors led by KKR fund for 1.6 billion euros.
Vodafone Group's market value rose 4.5% on rumors of a possible merger with carrier Three in the UK and Iliad in Italy.
The main attention of the market is drawn to the meeting of the Committee on operations on the open markets of the US Federal Reserve, which will begin on Tuesday and end on Wednesday. As expected, following the meeting, the Fed may signal its readiness to raise the key interest rate as early as March.
Also a negative factor is the growing tension in Eastern Europe. The US State Department on Sunday recommended that American citizens in Ukraine leave the country immediately, citing an excessive increase in Russia's military presence on the border.
The UK on Sunday also accused Russia of trying to bring a leadership loyal to the Kremlin to power in Ukraine.
Meanwhile, NATO is putting its military on alert and sending more ships and fighter jets to Eastern Europe as Russian forces build up near Ukraine.
Renne Friedman, senior economist at Exante, said the poor start to the week follows a fairly bearish week for risk assets. Investors were unimpressed by US banks' fourth-quarter quarterly reports, and besides, fears about the Fed's tightening policy and high inflation in various regions of the world put significant pressure on risk appetite.
In addition, investors are evaluating the latest batch of statistics on the change in the Purchasing Managers' Index (PMI) in the euro area in January.
The consolidated PMI of 19 eurozone countries fell to 52.4 points this month from 53.3 points in December, according to preliminary data from Markit Economics. Analysts at Trading Economics on average expected the indicator to drop to 52.6 points.
The PMI in the services sector in the euro area fell to 51.2 from 53.1, while in the manufacturing sector the indicator rose to 59 from 58 last month.
The consolidated PMI of Germany in January rose to 54.3 points from 49.9 points last month. The indicator is again above the 50-point mark, which separates the growth of business activity from the recession.
In the service sector in Germany, PMI rose to 52.2 from 48.7 points, in the manufacturing industry - up to 60.5 points from 57.4.
The January value of the consolidated PMI of France amounted to 52.7 points compared to 55.8 points in December. The index of business activity in the service sector fell to 53.1 from 57 points, in the manufacturing industry - to 55.5 from 55.6 points.