In early deals, London's FTSE 100 index of top companies shed 1.4 percent to 7,384,68 points.

BP's share price slumped 6.0 percent after the British energy giant signalled its exit from Russia.

BP announced Sunday that it will pull its 19.75-percent stake in Rosneft following Russia's assault on Ukraine.

In the eurozone, Frankfurt's DAX index shed 2.1 percent to 14,261.92 points and the Paris CAC 40 dropped 2.6 percent to 6,579.66 points.

"Another crazy start to the week, with the latest sanctions from the West having the teeth that their previous attempts lacked," OANDA analyst Craig Erlam told AFP.

"It's a massive blow for Russia and we are now seeing the consequences of that."

"With the latest sanctions comes uncertainty though which is weighing heavily on risk appetite at the start of the week."

Sentiment was also slammed as Brent oil rebounded back above $100 per barrel, fanning fresh fears of soaring inflation, while the ruble collapsed in value.

"The Russian invasion in Ukraine and the bigger sanctions imposed on Russia take a severe toll on market sentiment," added SwissQuote analyst Ipek Ozkardeskaya.

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