On Monday European stocks dropped as Italy’s borrowing costs rose after the nation sold Eur 3 billion euros of bonds at the highest yield since 1997. Asian shares climbed and U.S. index futures fell.

Banks reversed earlier gains, led by Banco Bilbao Vizcaya Argentaria SA and UniCredit SpA, which both fell more than 2 percent. Hochtief AG plunged 9.6 percent after the construction company said the sale of its airport-operating business has been delayed.

The benchmark Stoxx Europe 600 Index dropped 1.1 percent in London as all 19 industry groups declined.

Stocks initially climbed after Mario Monti, a former European Union competition commissioner, was appointed Italy’s new prime minister, as the country tackles the euro region’s second-biggest debt.

Silvio Berlusconi resigned after defections ended his parliamentary majority and the country’s 10-year bond yield surged over the 7 percent threshold that prompted Greece, Ireland and Portugal to seek EU bailouts.

In Greece, the nation’s finance minister, Evangelos Venizelos, said his priority is to ensure the country gets a sixth loan under an EU-led bailout after Prime Minister Lucas Papademos took charge of a new interim government.

Spiegel magazine reported that German lawmakers are preparing for Greece’s departure from the euro if the debt- strapped country’s new government doesn’t commit to reforms. The magazine did not say where it got the information.

The Stoxx 600 advanced last week after Italy’s Senate approved austerity measures, easing concern the country would need a bailout.

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., told CNBC in an interview that he does not own any banks in the euro region and lenders will still need more capital.

Asian stocks rose, paring two weeks of losses, amid optimism new governments in Greece and Italy will help contain Europe’s debt crisis and after top economists said China will have a “soft landing.”