LONDON — European stocks tumbled on Monday as investors braced themselves for the next meeting of the U.S. Federal Reserve this coming week, and watched for developments in Ukraine as tensions with Russia grow.

The pan-European Stoxx 600 was down 3% by mid-afternoon trade, with both tech and travel and leisure stocks plunging 5.3% as all sectors and major bourses slid into the red.

In terms of individual share price movement, Unilever gained 8.1% after reports that activist investor Nelson Peltz has accumulated a stake in the British consumer goods company.

At the bottom of the European blue chip index, trading in French care home company Orpea was suspended with the stock down 16%, after French newspaper Le Monde published an unfavorable excerpt from an investigative book alleging poor conditions in its care homes.

European markets followed their Asia-Pacific counterparts lower on Monday as investors reacted to heightened tensions between the Ukraine and Russia, and looked ahead to the U.S. Federal Reserve’s monetary policy meeting this week.

The Federal Open Market Committee is due to meet on Tuesday and Wednesday to decide on the next steps for U.S. monetary policy.

Rising inflation is a major concern for the U.S. central bank and investors will listen closely to hear how worried the Fed actually is — Chairman Jerome Powell is due to brief the media Wednesday afternoon local time after the FOMC releases its statement.

In the meantime, markets are likely to be shaken by concerns that there could be an imminent military conflict between Ukraine and Russia.

The U.S. State Department recommended Sunday that all U.S. citizens in Ukraine depart the country immediately, citing Russia’s extraordinary military buildup on the border.

“Our recommendation to U.S. citizens currently in Ukraine is that they should consider departing now using commercial or privately available transportation options,” a senior State Department official said Sunday evening on a call with reporters.

On Saturday, the U.K. accused the Kremlin of seeking to install a pro-Russian leader in Ukraine. Russia has repeatedly denied it is preparing to invade its neighbor.

Data on Monday showed the euro zone economic recovery continued to stutter in January as the omicron Covid-19 variant led to renewed containment measures which dented activity. IHS Markit’s flash composite PMI (purchasing managers’ index) dropped to 52.4 in January from 53.3 in December, the lowest since February.

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— CNBC’s Amanda Macias and Saheli Roy Choudhury contributed reporting to this story.



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