By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks fell Monday, as investors extended last week's selloff, and as markets watched escalating tensions between Ukraine and Russia.

The Stoxx Europe 600 index lost 0.6% to 326.74, adding to Friday's fall of 1.4%. Last week, the Stoxx 600 fell 3.1%, the first such decline since the week ended March 14.

Monday's decliners included PSA Peugeot Citroën , down 4.3% after the French car maker outlined cost reductions and other measures in an effort to return to profitability.

Also down was GlaxoSmithKline PLC , with shares off 1.1% after a BBC "Panaroma" report that the British drug maker is facing a criminal investigation in Poland for allegedly bribing doctors to promote the company's Seretide asthma medication. GSK said in statement that it disciplined an employee in 2011 over "inappropriate communication" in its Polish program and that it continues to investigate as it cooperates with Poland's anti-corruption bureau.

European stocks were unable to capitalize on signals that the European Central Bank is open to considering asset purchases to keep long-term interest rates low. ECB executive board member Benoit Coeure said Sunday that if further monetary accommodation is needed, that "it is reasonable to consider other operations aimed at lowering the term premium." Coeure's comments followed ECB President Mario Draghi's speech on Saturday, during which he warned again that a further rise in the euro could lead to additional monetary easing.

"The message coming out from the meeting was that a cut in interest rates is likely at first, possibly into negative territory. Only after that would the ECB attempt a quantitative-easing program," said Marshall Gittler, head of global currency strategy at IronFX, in a note Monday. The euro (EURUSD) fell against the U.S. dollar on the prospect of further easing measures.

Stocks globally have been under pressure, largely stemming from valuation concerns in so-called momentum shares on Wall Street, where the tech-heavy Nasdaq Composite (RIXF) also slid 3.1% last week.

Investors on Monday were monitoring developments in Ukraine and Russia as pro-Russian activists in eastern Ukraine ignored a Kiev-issued deadline to disarm. Ukraine said it will launch military force against Russian separatists who have seized Ukrainian government buildings. Ukraine's Interim President Oleksandr Turchynov, meanwhile, said he wasn't opposed to the activists' call for a nationwide referendum on regional autonomy.

Russian stocks as tracked by the MICEX index pulled back 1.4% to 1,343.67, and the RTS benchmark lost 2% to 1,180,23.

In country-specific indexes, Germany's DAX 30 fell 0.6% to 9,259.81, building on last week's loss of 3.9%, and France's CAC 40 gave up 0.4% to 4,348.61.

The FTSE 100 declined 0.4% to 6,535.17, but Glencore Xstrata PLC outperformed the broader market, rising 1.4% following the company's $5.8 billion sale of Peruvian copper mine project to a Chinese consortium.

In other movers, Banca Popolare di Milano tumbled 9% after shareholders over the weekend rejected the board's governance-reform proposal.

The trading week will be shortened by the Good Friday holiday.

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