• More sanctions have been imposed on Russia for its invasion of Ukraine, with the U.S., Europe and Canada agreeing to remove key Russian banks from the interbank messaging system, SWIFT.
• Individual share price movement on Monday was heavily dictated by the conflict, with defense companies rallying after Germany's decision to boost defense spending, while Russian-exposed stocks plunged.

LONDON — European stocks closed slightly lower on Monday as global markets tracked developments in the Russia-Ukraine crisis.

The pan-European Stoxx 600 provisionally ended down 0.2%, with banks plunging 4.4% to lead losses on the back of fresh sanctions.

The Russian advance into Ukraine continued throughout the weekend. Russian military vehicles entered Ukraine's second-largest city Kharkiv, with reports of fighting taking place and residents being warned to stay in shelters.

More sanctions have been imposed on Russia for its invasion of Ukraine, with the U.S., Europe and Canada agreeing Saturday to remove key Russian banks from the interbank messaging system, SWIFT. The U.K. and EU have also closed their airspace to Russian aircraft.

Russian President Vladimir Putin put his country's nuclear deterrence forces on high alert on Sunday amid a growing global backlash against the invasion. Ukraine's Defense Ministry said representatives for Ukraine and Russia have agreed to meet on the Ukraine-Belarus border "with no preconditions."

U.S. stocks retreated on Monday as investors grew concerned about the economic ramifications of the Russia-Ukraine crisis. Shares in Asia-Pacific were mostly higher by Monday's close.

Oil futures were up around 3% and the Russian ruble initially dived around 29% against the dollar early on Monday morning before recouping some of its losses, as markets assessed the impact of sanctions on Russia.

Earnings came from Atos, Signify and GSK on Monday.

Defense pops, Russian-exposed stocks sink

Individual share price movement on Monday was heavily dictated by the conflict.

Defense companies rallied hard in early trade, with Rheinmetall soaring 25% to lead gains after the German government's decision to increase defense spending. Shares of BAE Systems, Leonardo and Thales all saw double-digit bounces.

At the bottom of the European blue chip index, Polymetal International plunged more than 56% as the Anglo-Russian miner continued to nosedive as a result of its Russian exposure. Finland's Nokian Tyres tumbled 20%.

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— CNBC.com staff contributed to this market report.