European shares turned lower on Monday with earlier gains seen in the price of oil reversed after heavy gunfire was heard outside a Sydney cafe where hostages were being held. The pan-European Euro STOXX 600 fell to trade over 1 percent lower in afternoon trade as an ongoing hostage situation in Australia intensified, as shots were fired and explosions were reported as more hostages fled from the besieged cafe.The gunman has been identified as self-styled sheikh whose website is known for its extreme political views.Brent crude futures turned negative shortly in late afternoon trade and U.S. crude oil extended losses, falling back below $60.U.S. stocks wavered on Monday, with Wall Street’s bounce back losing steam as the price of oil fell.In stocks news, shares of telecoms giant BT were trading up 1.7 percent following rumors that the company could soon announce a takeover deal.Danske Bank said it expected to make goodwill impairments of around 9 billion Danish krone ($1.5 billion) in its 2014 annual report. The penalties relate to the Danish bank’s activities in Finland, Northern Ireland and Estonia, it said.In Asia, business sentiment in Japan worsened in the fourth quarter, data showed on Monday. Meanwhile, Japanese Prime Minister Shinzo Abe won a snap election over the weekend, according to media exit polls, giving him a fresh mandate to continue his strategy to revive the economy.