The German DAX fell 3.7% as SAP slumped almost 22% after abandoning medium-term profitability targets and cautioning that its business would take longer than expected to recover from the pandemic hit.

"SAP's pessimism does not bode well for hopes for the global economic recovery to continue," said Edward Moya, senior market analyst at OANDA, New York.

"If tech goes, the deteriorating outlook due to virus spread will likely yield massive risk aversion as investors head for the sidelines instead of rotating into cyclicals."

The wider European tech index <.SX8P> slid 7.4%.

SAP's results came as a blip in the third-quarter earnings season, which has been largely better than feared.

Meanwhile, fresh COVID-19-induced restrictions in Italy and Spain to curb a resurgence in cases weighed on the rest of Europe, with the pan-European STOXX 600 index closing at a one-month low, down 1.8%.

Europe on Saturday became the second region after Latin America to surpass 250,000 deaths, according to a Reuters tally.

The euro zone blue-chip index <.STOXX50E> fell nearly 3%, while Europe's travel and leisure sector, worst hit by the movement curbs, was down 3.3%.

Nick Nelson, head of European equity strategy at UBS, said the Swiss bank's target for STOXX 600 into the year-end is 340 points, about 4.5% below the current level, in part due to the impact of the latest round of restrictions.

Surveys of euro zone purchasing managers last week showed economic activity slipped back into decline in October, heightening expectations for a double-dip recession as a second wave of virus sweeps across the continent.

Globally, risk appetite was sapped by worries over slow progress on a new U.S. stimulus bill and a looming presidential election. [MKTS/GLOB]

Milan's blue-chip index fell 1.8% even as ratings agency Standard and Poor's upgraded Italy's sovereign outlook to stable from negative.

Oil majors Total and Royal Dutch Shell fell over 2.8% as crude prices slumped more than 3% on demand worries. [O/R]

Healthcare stocks remained supportive, with AstraZeneca gaining 1.7% after it resumed the U.S. trial of its experimental COVID-19 vaccine.

French stocks dipped 1.9%. Turkish leader Tayyip Erdogan asked his compatriots to stop buying French goods on Monday in the latest expression of anger in the Muslim world over images being displayed in France of the Prophet Mohammad, which some Muslims consider blasphemous.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Emelia Sithole-Matarise)

By Sruthi Shankar and Susan Mathew