The last trading session of September in Europe is expected to begin with a decline.

The last trading session of September in Europe is expected to begin with a decline.
The last trading session of September in Europe is expected to begin with a decline.

European stocks are predicted to commence the week and the last trading session of September on Monday in a downward trend.

According to IG's data, the U.K.'s index is seen opening 16 points lower at 8,305, Germany's index is 43 points lower at 19,434, France's index is down 7 points at 7,791, and Italy's index is 1 point lower at 34,626.

Despite the pan-European index reaching a new record high on Friday, European markets experienced a lackluster start, as stocks failed to maintain the momentum gained from China's stimulus measures announcement last week.

In the Asia-Pacific region, Chinese stocks surged by more than 6% overnight, while Japan's Nikkei 225 fell by 4.64%, as investors evaluated crucial economic information from both countries.

Despite economists predicting a reading of 49.5 for China's official purchasing managers' index in September, the actual reading came in at 49.8, indicating expansion for the manufacturing sector. However, this marked the fifth consecutive month of contraction in the sector.

In August, Japan's industrial production decreased by 4.9% compared to the same month the previous year, surpassing the 0.4% decline recorded in July.

On Sunday night, U.S. stock futures remained unchanged, following three straight weeks of increases in major U.S. averages.

On Monday, Europe will release German inflation and retail sales data, as well as the final U.K. GDP data and the latest Italian inflation rate.

— CNBC's Lim Hui Jie contributed to this market report.

by Holly Ellyatt

Markets