While you were sleeping: European stocks slide, oil glut worries

Equities in Europe fell as did the price of oil, which declined to a fresh 12-year low amid concern about Iran adding to the worldwide glut.

Oil slid, pushing Brent crude below $US28 a barrel for the first time since December 2003, on concern Iran is set to add more supplies to the global glut after international sanctions against the country over its nuclear program were lifted at the weekend.

"The lifting of key sanctions should allow [Iran] to increase crude exports this year by at least 500,000 barrels a day on average, putting further downward pressure on oil prices in the near term," Barclays analysts said in a note on Monday, Reuters reported.

Separately, the Organisation of the Petroleum Exporting Countries said supply from non-member nations will drop 660,000 barrels per day this year, compared with a forecast for a decline of 380,000 barrels per day in last month's report. The drop will be led by the US, Opec noted in its monthly market report.

Opec is oversupplying global markets by about 600,000 barrels a day, the report noted.

"The analysis indicates  2016 will be a supply-driven market. It will also be the year when the rebalancing process starts," Opec said. "Non-Opec marginal barrel production in the next six months will be sensitive to sustained low oil prices."

The report made no reference to the lifting of international sanctions on Iran's oil exports, Bloomberg noted.

In Europe, stocks declined, led by a drop in bank stocks. The Stoxx Europe 600 Index finished the day with a 1.4%  decline from the previous close. The index has shed 14% this year.

Germany's DAX Index fell 0.3%, the UK's FTSE 100 Index slid 0.4%, while France's CAC 40 Index retreated 0.5% .

US markets were closed for the Martin Luther King Jr holiday on Monday.

Italian equities moved lower led by concern about the country's banks.

"Italian banks' asset quality is back in the spotlight," Wolfram Mrowetz, chairman of Alisei SIM, a Milan brokerage, told Bloomberg. "A delay in Italy's bad-bank plan, amid quarrels between Prime Minister Matteo Renzi and European Commissioner Jean-Claude Juncker, and [European Central Bank] challenges on the high level of non-performing loans are hurting stock."

To be sure, not all investors are as downbeat on the prospects for Italy's bank stocks.

"I would look at calls to exit Italian banks with a pinch of salt," Gilles Guibout, portfolio manager at AXA IM, told Reuters. "Consolidation has not yet happened but it will and then allow market repair and bring in efficiencies."

Global investors today are waiting for China's latest economic growth data.

(BusinessDesk)