European stock markets closed lower Monday as the Stoxx Europe 600 dropped 0.9%, Germany's DAX 40 slumped 1.5%, the FTSE 100 in London lost 1%, France's CAC 40 declined 1.2%, and the Swiss Market Index fell 0.4%.

Euro area annual inflation rose to 2.5% in January from 2.4% in December, according to a flash estimate from Eurostat, the statistical office of the European Union. Croatia had the highest estimated inflation rate at 5%, while Ireland's registered the lowest at 1.5%.

The HCOB Eurozone Manufacturing Purchasing Managers' Index, which gauges the health of eurozone factories, rose to an eight-month high of 46.6 in January from 45.1 in December. The index remained below 50, which separates growth from contraction.

In the UK, the seasonally adjusted S&P Global UK Manufacturing Purchasing Managers Index increased to 48.3 in January from 47 in December, remaining below the 50-point threshold for four straight months, indicating deterioration.

In corporate news, AstraZeneca said its Imfinzi drug was recommended for approval in the EU as a monotherapy for limited-stage small cell lung cancer in adults.

AstraZeneca rejected 78 million British pounds ($96.4 million) of UK government support after the new administration sought to reduce the amount of public support the company was promised by the previous administration to build a vaccine manufacturing facility, the Financial Times reported.

Novo Nordisk owner Novo Nordisk Foundation won't step in to support health and humanitarian organizations affected by a freeze on US international aid and will continue to concentrate on its core non-communicable disease program, Reuters reported.

German biotech firm BioNTech completed its acquisition of Biotheus for $800 million, mostly in cash, and gained full global rights to BNT327 and Biotheus' portfolio of antibody candidates.