The pan-European STOXX 600 index edged up 0.04% after touching a more than one-year high on Friday, with miners and oil offsetting losses in defensive sectors such as utilities and healthcare.
Germany's blue-chip DAX slipped 0.2% after hitting an all-time high in the prior session.
U.S. stocks closed lower on Friday as debt ceiling negotiations in Washington were paused, denting optimism a deal could be reached in the coming days to dodge a default.
President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling on Monday after the two leaders held a phone call on Sunday that both sides described as positive.
"As both sides try to get the most out of this deal, there is a lingering risk that talks will extend until the last minute, and risks of a liquidity crunch following a deal (due to the huge new issuance needs for the U.S. Treasury) are also massive suggesting the need for downside protection," Saxo Bank analysts said.
Investors are awaiting speeches from a slew of European Central Bank policymakers and euro zone consumer confidence data later in the day for hints on how much longer the central bank will hike interest rates.
European chip stocks were unfazed by Beijing's move to bar U.S. firm Micron Technology Inc from selling memory chips to key domestic industries.
Shares of Infineon Technologies AG, STMicroelectronics NV and ASM International NV were mixed, while Micron's Frankfurt-listed shares dropped 5.1%.
"Although the news is negative for sector sentiment given that China represents between 10% and 40% of sales for most companies... we cannot make a general statement as U.S. memories are fungible with Korean ones (Samsung, Hynix) while other products are not," Equita analysts wrote in a note.
Meanwhile, Greece's ruling New Democracy party stormed to a crushing victory in a parliamentary election on Sunday but fell just short of the threshold needed to form a government on its own, making a runoff election in a month more likely.
The country's benchmark bond yields slipped on the news, while the benchmark equities index climbed 6.6% with banks at the forefront of the rally.
Novo Nordisk A/S climbed 2.2% after research showed taking its new obesity drug may help reduce the risk of heart disease as well as boost weight loss.
Sartorius fell 3.8% after Morgan Stanley downgraded the Franco-German lab equipment maker's stock to "equal-weight", citing destocking risks.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Varun H K and Eileen Soreng)
By Sruthi Shankar
