European shares, which jumped to 13-month highs last week after the European Central Bank laid out new plans to address the region's debt crisis, opened in negative territory for the second day running, down 0.2 percent at 1,105.52 points.

London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX were all lower , following on from Asia, where investors, increasingly wary about China's wobbling economy, took profits from the recent stimulus-led rally.

Europe faces another testing week. Despite a late legal challenge from a eurosceptic lawmaker, Germany's constitutional court will rule on the powers of the euro zone's new ESM bailout fund on Wednesday. Dutch voters also go to the polls that day in the latest test of core Europe's resolve to keep the bloc intact.

"There is a broad consensus that the (equities) rally has really discounted all the good news that could come in the next couple of weeks and the risks are really skewed to the downside," said Peter Garnry, equities strategist at Saxo Bank.

The German court statement that it would not delay its ESM ruling sparked life into a subdued euro, sending it back above $1.2800 and towards its $1.2834 200-day moving average.

The dollar weakened elsewhere, too, hitting a three-month low against the Swiss franc and down 0.06 percent against a wider basket of currencies.

German government bonds, typically favoured by risk-averse investors, were back in demand.

Bund futures were up 62 ticks at 140.94 as uncertainty remained around the outcome of the ESM ruling and as worries resurfaced on Greece's fiscal repair plans.

Oil prices remained firm, with Brent crude futures at $114.45 a barrel. Spot gold, which has rallied nearly 7 percent over the last month, added 0.2 percent to $1,727.91 an ounce.

Reflecting growing investor jitters, the CBOE Volatility index posted its biggest daily increase in seven weeks on Monday.