TOKYO (AP) -- European stocks declined Monday, tracking losses in Asia as worries over interest rate hikes dominated an array of investor concerns.
The Shanghai Composite index sank 5.1% and Hong Kong fell 3.7% as China reinforced its stringent pandemic policies while case numbers rose.
Oil prices slipped more than $4 per barrel, and the U.S. dollar was trading near 128 Japanese yen.
France's CAC 40 dropped 2.0% in early trading to 6,451.27.
The news that Emmanuel Macron won the run-off French presidential election over the weekend, clinching a second term as was widely expected, reassured markets that France won't abruptly shift course in the midst of the war in Ukraine.
But the significant show by contender Marine Le Pen, a populist and nationalist, served as a reminder of how fragile that situation might be, analysts said. Le Pen pledged to dilute French ties with the EU, NATO and Germany, and spoke out against EU sanctions on Russian energy supplies.
Germany's DAX lost 1.4% to 13,943.88. Britain's FTSE 100 shed 2.2% to 7,354.94. The future for the Dow industrials was down 0.7% while that for the S&P 500 fell 0.8%.
In Asian trading, Japan's benchmark Nikkei 225 lost 1.9% to finish at 26,590.78. South Korea's Kospi slipped 1.8% to 2,657.13. Hong Kong's Hang Seng dropped 770 points to 19,869.34, while the Shanghai Composite shed 158 points to 2,928.51, dipping below 3,000 for the first time since July 2020.
Hong Kong-traded shares in Internet company Baidu slumped 7%, while PetroChina lost 4% on falling oil prices.
"Coming after the heavy sell-off in Wall Street to end last week, overall risk appetite in the region may come under pressure as well," said Yeap Jun Rong, market strategist at IG in Singapore.
Rising COVID-19 cases in China are setting off worries about more pandemic lockdowns that would crimp economic recoveries in the region. Beijing imposed lockdowns in several districts after case numbers rose.
Investors are also watching profit reports from companies, including Japanese big names that are coming in weeks ahead. Several reports from U.S. companies, which have already been released, have been disappointing, contributing to the fall that ended last week on Wall Street.
What the U.S. Federal Reserve might do is high on investors' minds. The chair of the Federal Reserve has indicated the central bank may hike short-term interest rates by double the usual amount at upcoming meetings, starting in two weeks. The Fed has already raised its key overnight rate once, the first such increase since 2018.
Markets around the world are feeling similar pressure on rates and inflation, particularly in Europe as the war in Ukraine pushes up oil, gas and food costs.
In energy trading, benchmark U.S. crude lost $4.71 to $97.36 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell $4.86 to $101.29 a barrel.
In currency trading, the U.S. dollar edged down to 128.11 Japanese yen from 128.59 yen. The euro cost $1.07444, down from $1.0803.