Europe's main stock markets were sharply lower Monday, with the property sector reeling from a downbeat research note as investors awaited key results from Bank of America (NYSE:BAC) .

In morning European deals, London's FTSE 100 of leading shares sank 1.30 percent to 4,039.78 points, Frankfurt's DAX 30 shed 2.29 percent to 4,570.10 points and the Paris CAC 40 lost 2.12 percent to 3,026.40 points.

The DJ Euro Stoxx 50 index of leading eurozone shares was down 2.09 percent to 2,292.16 points.

The European single currency stood at 1.2964 dollars.

"European markets opened lower today (Monday) with the real estate sector particularly suffering after a downbeat JP Morgan Chase Co (NYSE: JPM) note on the European property sector," said analyst Joshua Raymond at spread-betting firm City Index.

"Investors are pausing for breath today in advance of key earnings reports due from BofA later today and Tesco, Lonmin, Yahoo, eBay Inc. (NasdaqGS: EBAY) and Morgan Stanley later in the week," he added.

The BofA results will follow a string of upbeat earnings news from the embattled US banking sector.

Ailing financial giant Citigroup rebounded in the first quarter to post a profit of 1.6 billion dollars while JPMorgan Chase and Goldman Sachs topped expectations for earnings and Wells Fargo predicted a record profit.

"The biggest draw for the session will be earnings news from Bank of America (NYSE:BAC) as the sector in general looks to start its slow recovery after the turmoil of the last 18 months," CMC Markets dealer Ian Griffiths said.

"Many expect some better-than-expected earnings from the banks to lead US stocks to their sixth straight week of gains."

In Asia on Monday, Japanese share prices closed slightly higher as investors looked ahead to a slew of upcoming corporate earnings reports while remaining hopeful of a recovery in the world economy.

Wall Street had eked out modest gains before the weekend after stronger-than-expected profits from Citigroup and General Electric.

In London on Monday, GlaxoSmithKline saw its shares gain 0.77 percent to 1,046 pence after it announced the purchase of US-based skincare group Stiefel Laboratories in a deal worth up to 3.6 billion dollars (2.7 billion euros).

The deal for Stiefel, a maker of anti-itching creams, acne treatments and other skincare products, had been widely expected after US media reports on Sunday.

Elsewhere in Asia on Monday, Hong Kong's benchmark Hang Seng Index closed up 0.96 percent at 15,750.91 points as investors recovered from earlier losses, dealers said.