European stocks closed lower on Monday, with the banking sector under pressure as German lender Deutsche Bank AG shares slid on its plans for a share sale. Investors showed little appetite for risky assets Monday, and that risk-off mode helped to pull shares of Deutsche Bank DBK, -7.89% DB, -3.82% down 7.9%, wiping out roughly $2 billion from the bank's market capitalization. The shares tumbled after the bank said it is planning an 8 billion euro ($8.5 billion) share sale in a bid to strengthen its capital position.

U.S. equity benchmarks closed down Monday, but off session lows, amid concerns over growing geopolitical tensions which have helped to refocus investors' attention on stock prices that have gotten rich by some measures. The downturn for stocks comes as North Korea tested four ballistic missiles off its east coast early Monday, Seoul time.

Asian stock markets were mostly higher in thin trading as investors assessed the prospects for further gains after a rally leading up to a near-certain U.S. interest-rate increase. South Korean and Hong Kong-listed Chinese stocks posted the biggest increases among equity gauges, with trading volumes down across the board.