German stocks slipped into the red on Monday as a survey showed the downturn in the countrys manufacturing sector, which accounts for about a fifth of Europes biggest economy, accelerated in August.
The HCOB final Purchasing Managers Index (PMI) dropped to 42.4 from 43.2 in July due to a steeper drop in incoming orders.
Also, a separate survey revealed that Euro zone manufacturing activity remained mired in contraction in August.
The benchmark DAX was down 30 points, or 0.2 percent, at 18,876 after finishing marginally lower on Friday.
The dollar climbed to a two-week high versus the euro ahead of a slew of key U.S. economic data due this week, including the non-farm payrolls report on Friday.