European equities fell sharply in choppy trading on Monday, with concerns over Greece's future in the euro zone and a steep drop in prices of crude oil and copper hurting financial and commodities stocks the most.
Energy and mining shares were the worst hit. The European oil and gas and basic resources indexes fell 4.9 percent and 3.6 percent respectively after a supply glut sent oil prices to a 5-1/2-year low and copper hit a 4-1/2-year trough due to a stronger dollar.
Investors fear the Jan. 25 election in Greece could vault the left-wing Syriza party into power, raising the risk of a sovereign default.
The euro zone's blue-chip Euro STOXX 50 fell 3.7 percent, the biggest one-day percentage drop since late 2011. Greece's ATG fell 5.6 percent, with National Bank, Bank of Piraeus and Alpha Bank slipping 5.2 to 7.4 percent.
"The rise of the anti-austerity Syriza party has sent shivers down the spine of dealers. A victory for the left-wing party does not automatically mean a Greek exit (from the euro zone) but traders will certainly see it that way," IG analyst Alastair McCaig said.
Greek jitters hit regional stocks. Italy's FTSE MIB and Spain's IBEX fell 4.9 percent and 3.5 percent respectively, while Britain's FTSE, Germany's DAX and France's CAC 40 were down 2.0 to 3.3 percent. The pan-European FTS Eurofirst 300 ended 2.3 percent weaker at 1,332.47 points.
Although most sectors in Europe were in negative territory following a broader market sell-off, the travel and leisure index, down 0.7 percent, outperformed on expectations that cheaper oil and a weaker euro would help the companies. Carnival, IAG and Air France-KLM rose 1.3 to 2.1 percent, while Ryanair shares, up 1.3 percent, hit an all-time high after the company said December traffic grew 20 percent.