Summary In late morning deals, London's FTSE 100 index of top companies slid 0.24% to 6,761.52 points.
LONDON (AFP) - European stock markets fell Monday on mounting fears over the Iraq crisis which has sent oil prices soaring to recent nine-month highs, dealers said.
Sentiment was also hit after gas supply talks between Russia and Ukraine broke down.
In late morning deals, London s FTSE 100 index of top companies slid 0.24 percent to 6,761.52 points.
Frankfurt s DAX 30 sank 0.35 percent to 9,878.24 points and in Paris the CAC 40 index dipped 0.59 percent to 4,516.48 compared with Friday s closing levels.
Oil prices advanced Monday on the back of the worsening crisis in Iraq, where insurgents were advancing on the capital Baghdad.
Anti-government fighters, led by the powerful Islamic State of Iraq and the Levant (ISIL) jihadist group, are said to have killed scores of Iraqi soldiers during their offensive, a "horrifying" massacre that has drawn international condemnation.
Brent crude for August delivery rose 34 cents to $112.80 per barrel on Monday, having jumped on Friday to $114.69 -- the highest level since September 2013.
- Investors seek safe assets -
The uncertainty fuelled by the insurgents who have seized a swathe of Iraq, sent traders into safer assets on Monday, with the yen ticking higher against the dollar and the euro while gold also rose.
"Global equities are under pressure as tensions escalate in Iraq and the full impact of a potential increase in oil prices starts to weigh on the market," said Rebecca O Keeffe, head of investment at online stockbroker Interactive Investor.
"A substantial rise in oil prices could be particularly damaging to the still fragile global economic recovery, as both a tax on oil consumers and a source of higher inflation -- which in turn might limit the ability of global central banks to dictate their own timeline and force them to raise interest rates sooner."
Energy companies meanwhile rallied on the back of higher oil prices, which boost their revenues and profits.
In London, Royal Dutch Shell saw its A share price gain 0.57 percent to 2,384.50 pence, while BP gained 0.12 percent to 508.12 pence.
- Ukraine uncertainty -
Investor sentiment was plagued by simmering tensions between Ukraine and Russia.
Europe risked gas supply disruptions Monday after Russia rejected an 11th-hour compromise deal with Ukraine and cut its supplies in a feud that has further fractured East-West relations.
Ukraine hosted the last-gasp talks hoping to keep an energy shortage from compounding the problems of the new pro-Western leaders as they confront a two-month separatist insurgency threatening the very survival of the ex-Soviet state.
But Russia s state gas giant Gazprom said it had switched Ukraine to a pre-payment system at 0600 GMT -- a move that effectively halts all shipments because Kiev has not forwarded any money for future gas deliveries to Moscow.
Pro-Russian rebels killed 49 Ukrainian troops on Saturday by downing a military plane in the deadliest attack against federal forces in the two-month insurgency.
"Tensions have also escalated over the weekend, with promises of retaliation after the shooting down of a plane in Luhansk," added O Keeffe.
"The threat of wider disruption in the region and the potential pressure on natural gas prices going forward is adding to market risks."
- Pound surges against dollar -
In foreign exchange activity on Monday, the British pound soared to a five-year high at $1.7011 on expectations the Bank of England will raise interest rates within the next six months. It later stood at $1.6974, up from $1.6962 on Friday.
The euro slid to 79.69 British pence from 79.79 pence.
The European single currency decreased to $1.3526 from $1.3538 late in New York on Friday.
And on the London Bullion Market, the price of gold rose to $1,280.80 an ounce from $1,273 late on Friday.
