London's FTSE 100 benchmark index of leading shares slid 0.33 percent to 5,945.90 points in morning trading and in Paris the CAC 40 dipped 0.52 percent to 3,575.99 points, while Frankfurt's DAX 30 shed 0.38 percent to 7,130.56.

In foreign exchange deals, the euro retreated to $1.3157 from $1.3175 late in New York on Friday.

Asian shares were mostly higher on Monday on the back of lingering optimism over the recovery in the global economy but the advances were tempered by US data that came in below expectations.

Before the weekend, Wall Street stocks closed mixed on Friday after a slate of data reports delivered more murky signals than clarity about the health of the world's biggest economy.

"Last week saw gains for major indices across the globe but a set of subdued US data on Friday took the edge off an impressive week," said Capital Spreads dealer Jonathan Sudaria.

Despite Monday's modest losses, European shares have soared in value since the start of 2012, boosted by upbeat company results and growing optimism that the worst of the eurozone crisis is over.

So far this year, the London market has gained 9.0 percent, Paris 15 percent and Frankfurt has surged by 22 percent, but sentiment remains clouded by high oil prices and fresh concerns about debt-laden Portugal, dealers said.

"Market had a brighter start to year following Greek debt agreement and strong corporate performances, notably in the United States," said trader Mike Mason at Sucden Financial Private Clients.

"However, at current levels investors are fretting about high oil prices, a slowing of growth and Portugal's huge debts."

Across in Asia on Monday, Tokyo rose 0.12 percent, Shanghai added 0.23 percent, Sydney climbed 0.34 percent and Seoul won 0.62 percent. On the downside, Hong Kong shares closed 0.95 percent lower.

Global investors have grown bullish in recent weeks after Greece agreed a debt write-down with private creditors qualifying it for a bailout while the US has also provided weeks of good news that point to a brighter future.

A batch of data out of the United States on Friday kept traders in check Monday.

Consumer prices picked up in February, but almost entirely due to surging petrol prices as food prices were flat, and the core consumer price index rose just 0.1 percent -- slower than in January.

The Federal Reserve also said industrial output was flat in February, following a 0.4 percent rise in January.

And the University of Michigan index of consumer confidence fell slightly, after analysts had forecast a rise.