European shares edged lower on Monday in their first day of trade since the Christmas break, with investors reluctant to place strong bets in thin year-end trading.

Germany's DAX was down 0.1 per cent at 0856 GMT, the Euro STOXX 50 index fell 0.2 per cent, while France's CAC dropped 0.4 per cent.

Volumes on the DAX and the CAC were about 4 per cent of their 90-day daily average in the first hour of trading.

Naeem Aslam, chief market analyst at AvaTrade, said weak Chinese economic data released on Sunday was also putting some pressure on markets.

"The bias could be skewed towards the downside and most of the bets may also be anchored towards this direction," he said.

Figures showed that profits earned by Chinese industrial companies in November fell from a year earlier, marking a sixth consecutive month of decline.

Shares in ArcelorMittal fell 2.5 per cent on profit-taking, after surging 17 per cent in the previous week on a report saying that China was likely to cut its steel surplus that has kept prices at decade lows.

Adidas fell 0.7 per cent after the company's CFO Robin Stalker told Boersen-Zeitung that he expected sourcing costs to rise by half a billion euros in 2016 due to negative currency effects.

However, Banca Monte dei Paschi rose 2 per cent after Italy's third-largest bank said it had signed a binding agreement to sell a portfolio of non-performing loans with a gross book value of 1 billion euros ($1.1 billion) to a Deutsche Bank vehicle

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