This was CNBC's live blog covering European markets.

All major European stock markets fell on Monday amid rising government bond yields and a surging U.S. dollar.

The pan-European Stoxx 600 index ended the day 0.55% lower, with most sectors in negative territory.

It's the second day of losses for investors in the FTSE 100 and CAC 40 while Germany's DAX has fallen for four consecutive days in a row.

The Netherlands-headquartered Redcare Pharmacy was among the biggest losers for the day. The company's shares lost nearly a tenth of their value after German retailer dm-drogerie markt last week announced plans to become a competitor in the sector.

Early trading on Monday was driven in part by U.S. jobs data released last week that showed nonfarm payrolls were up by 256,000 last month — much more than the 155,000 forecast by economists polled by Dow Jones.

The data subdued sentiment among global markets as it raised concerns that the U.S. Federal Reserve would proceed with caution when it comes to further interest rate cuts.

Investors in the region will continue to keep an eye on euro zone and U.K. government bond yields after yields climbed to fresh multi-month highs last week.

Global markets will also be focused on the U.S.' December consumer price index on Wednesday morning, after the December producer price index report on Tuesday.

European markets close lower

European markets closed lower on Monday amid persisting jitters over the global economy, rising bond yields, and a surging U.S. dollar.

The pan-European Stoxx 600 index ended the session 0.55% lower, with most sectors in the red. Energy, mining and utilities in the red.

Germany's DAX provisionally closed down by 0.38%, while France's CAC and the U.K.'s FTSE 100 were lower by around 0.3%.

— Ganesh Rao

U.S. markets open lower

U.S. stock markets started the week on a downbeat note. The Nasdaq Composite fell by 1.7% within the first trading hour while the S&P 500 declined by 0.9%.

Rising government bond yields have been partly behind the sell-off in the U.S. and European markets. The U.S. 20-year yield traded above 5% Monday, the highest since November 2023.

The Stoxx 600 is attempting a comeback in Europe but is still in the red for the day. The index is off today's lows and was last trading at 0.5% lower at 3:37 pm London time.

— Ganesh Rao

Gilt yields higher with UK borrowing costs in focus

U.K. borrowing costs largely ticked higher Monday, after medium- and long-dated government bonds climbed to more than decade-highs last week.

The 2-year gilt yield was three basis points higher at 1:10 p.m. in London at 4.57%, while the 10-year yield rose two basis points to 4.864%, remaining at its highest level since 2008. The 30-yield yield, which on Friday was at its strongest since 1998, was fractionally above the flatline.

A global rise in yields is being led by the U.S. and expectations of fewer interest rate cuts in 2025, but the U.K. is also grappling with investor concerns over its growth prospects and debt levels.

— Jenni Reid

Markets are re-appraising the UK’s economic prospects, former chancellor says

The U.K.'s former Chancellor of the Exchequer, Philip Hammond, discusses the recent spike in U.K. borrowing costs and the fiscal challenges facing the British government.

U.S. dollar surges

The U.S. dollar index — which measures the greenback against a basket of rivals — hit its highest level in more than two years on Monday, following a hotter-than-expected jobs report out of the United States last week.

By 10:30 a.m. London time, the dollar index was up 0.3% to trade at 110, its highest price since Nov. 2022.  

— Chloe Taylor

UK corporates plan cost-cutting measures in 2025, Deloitte says

In its most recent survey of Chief Financial Officers (CFOs), accounting giant Deloitte found that U.K. corporates are looking to cut costs as they grapple with rising National Insurance payments — with staffing costs among those facing the chopping block.

Polled between Dec. 3 and Dec. 16, CFOs reported the sharpest decline in hiring expectations since the Covid-19 pandemic, while their business confidence fell to a two-year low.

— Chloe Taylor

Novartis’s U.S. patent for Entresto upheld

The U.S. Court of Appeals has ruled the patent for Novartis's heart medication Entresto is valid, the Swiss pharmaceutical giant said on Monday.

The ruling reverses a 2023 decision by a U.S. District Court in Delaware.

Novartis said Entresto's pediatric exclusivity period will expire in July this year.

— Chloe Taylor

UK’s Starmer lays groundwork for a homegrown OpenAI rival

British Prime Minister Keir Starmer announced on Monday that his government is aiming to increase public sector compute capacity by twentyfold before the end of the decade, as the U.K. seeks to build a homegrown OpenAI rival.

Starmer's government is also looking to expand data center capacity across Britain to allow powerful AI model's developers to train and run their systems.

Read the full story here.

— Chloe Taylor

CNBC Pro: LA fires could hit European insurance giants with about billion euros in losses

The wildfires around Los Angeles are set to cost European insurance giants up to a billion euros in payouts this year.

At least seven European listed reinsurance firms are expected to bear about a billion euros ($1.02 billion) of the losses over the wildfire, according to analysts at German investment bank Berenberg.

In addition, JPMorgan analysts have identified at least 2 Japanese firms that are likely to be on the hook for payouts.

CNBC Pro subscribers can read more here.

— Ganesh Rao

European markets: Here are the opening calls

European markets are expected to open in mixed territory Monday.

The U.K.'s FTSE 100 index is expected to open 22 points lower at 8,227, Germany's DAX down 37 points at 20,182, France's CAC down 11 points at 7,413 and Italy's FTSE MIB down 143 points at 34,999, according to data from IG.

There are no major earnings or data releases Monday.

— Holly Ellyatt