European markets mixed in a big week for earnings and monetary policy; Philips down 9%

The pan-European Stoxx 600 hovered around the flatline by early afternoon, having initially dropped more than 0.4% in early trade. Banks jumped 1.8% while travel and leisure stocks fell 0.7%.

Much of this week's focus will center around the U.S. Federal Reserve's two-day policy meeting, concluding on Wednesday, with economists broadly expecting a 75 basis point hike to interest rates by the central bank.

The European Central Bank last week kick-started its own hiking cycle with a 50 basis point increase, larger than previously suggested.

Hawkish ECB policymaker Robert Holzmann told an Austrian broadcaster on Sunday that the Governing Council will consider the economic landscape across the euro zone before determining whether another big rate hike will be feasible in September.

Shares in Asia-Pacific were mostly lower overnight as concerns about a global economic downturn put the brakes on a recent return to risk-on sentiment for investors, with traditional safe haven bonds and the dollar finding substantial bids.

U.S. equities were slightly lower on Monday as traders braced for the busiest week of corporate earnings, as well as insights into further interest rate hikes from the Federal Reserve.

Corporate earnings will also be a key driver of stock market movement in Europe, with UBS, Unilever, LVMH, Credit Suisse, Deutsche Bank, Daimler, Shell, Barclays, Nestle and Renault among the major players reporting throughout the week.

Notable earnings due before the bell on Monday came from Ryanair, Vodafone, Philips, Faurecia and Julius Baer.

Philips shares plunged 9% after the Dutch medical equipment company missed second-quarter core earnings expectations by a significant margin and cuts full-year and mid-term profit outlook.

At the top of the Stoxx 600, French car parts supplier Faurecia climbed more than 5% after a strong set of first-half results.

On the data front, a key business climate index for July from Germany's Ifo Institute came in at 88.6 on Monday, its lowest level for more than two years, as business morale plunged as a result of spiraling energy prices and impending gas shortages.