2018.01.1521:01:00UTC+00European Markets Edge Down as Euro Nears 3-Year Peak

European stocks closed marginally lower on Monday, amid a lighter trading day, weighed as the euro is getting closer to a 3-year high.

The pan-European STOXX 600 came off its lows, to end provisionally 0.17 percent lower, while major sectors were mostly down by the market close.

The U.K.'s FTSE 100 dropped 0.12 percent, while France's CAC 40 fell 0.13 percent and Germany's DAX lost 0.34 percent. In peripheral markets, Italy's FTSE MIB climbed 0.49 percent.

Investors were also watching for developments from the U.K., where construction and outsourcing heavyweight Carillion has collapsed. The company had entered into liquidation. The company's shares were suspended from trading, but its rivals gained on the news, with Serco rising more than seven percent and Interserve climbing two percent.

U.K. banking stocks were consequently in focus as HSBC and RBS are seen as some of its top creditors. Both lenders ended trade in the negative territory.

Meanwhile, Banco Santander dropped 0.3 percent. The Spanish lender is set to be hurt by Carillion's collapse as Santander's U.K. branch is one of the company's principal creditors, business daily Expansion reported.

Utilities was the second top-performing sector. Endesa was a top performer, advancing 1.4 percent after Goldman Sachs improved its price target and rating on the stock.

Azimut Holding surged 13 percent as the asset manager said it expects to close the fiscal year with its second-best consolidated net profit ever. Vivendi was among the top performing stocks too, climbing 2.7 percent following a rating upgrade, providing a boost to the media sector.

Most European benchmark were stuck in the negative territory while the euro headed towards $1.2300, a level that hasn't been seen since December 2014, according to FactSet data. A stronger euro can make products produced by European exporters more expensive for their overseas customers to purchase.