European stocks dropped to their lowest in more than three months Monday, with bank shares among decliners as investors faced heightened concerns about the Brexit vote on whether the U.K. should cut ties with the European Union.

The Stoxx Europe 600 SXXP, -0.66% fell 1.1% to 326.80, a fourth straight loss and the weakest close since Feb. 25, FactSet data showed. All sectors lost ground, led by financial XX:SXFR , telecommunication SXKP, -1.23% and industrial SXNP, -0.54% shares.

The moves on European markets followed sharp losses across Asian stocks, with sent Japan’s Nikkei Average NIK, +0.17% tumbling by 3.5%.

“Asian markets were tattered as investors are concerned about the spike in volatility, and this has impacted the mood in Europe,” said Naeem Aslam, chief market analyst at Think Forex UK, in a note.

“There are a few reasons for this: The strength in the Japanese yen has spooked investors over in Asia; meanwhile, the [U.K.] referendum is pressing the investors’ appetite for riskier assets in Europe, and traders are wary about the upcoming Fed meeting this week in the U.S.,” he said.

The dollar USDJPY, -0.01% was down 0.8% at ¥106.08, while the euro EURJPY, -0.01% was off 0.5% at ¥119.93. The U.S. Federal Reserve will wrap up a two-day policy meeting on Wednesday, when it is expected to release a policy statement, the dot plot of interest-rate predictions and its new economist forecasts.

Read:Cameron warns Brexit could endanger pensions

Banks and bonds: The pace at which investors have been seeking safety in government bonds has picked up in recent sessions, pushing prices higher and yields to record lows. Falling bond yields have underscored concerns about the profitability of the banking sector.

Italian shares were at the bottom of the Stoxx 600. Banca Popolare Societa Cooperativa IT:BP slid 10%, Banca Popolare di Milano IT:PMI fell 9.9%, and Banca Monte dei Paschi di Siena SpA BMPS, -1.53% lost 9.1%. German lender Commerzbank AG CBK, -2.32% fell 3.5%, and France’s Credit Agricole SA ACA, -3.15% gave up 3.3%.

The yield on the 10-year German bund TMBMKDE-10Y, -0.481% late Monday turned up by less than 1 basis point to 0.022%. On Friday, it touched a fresh record low around 0.010%.

See:Here’s why government bonds are risky right now

Indexes: Germany’s DAX 30 DAX, -0.69% lost 1.8% to end at 9,657.44, the lowest close since April 8. France’s CAC 40 PX1, -1.21% ended 1.9% lower at 4,227.02, the lowest since Feb. 24.

Italy’s FTSE MIB XX:FTSEMIB stumbled 2.9% to 16,621.87, while Spain’s IBEX 35 IBEX, -2.20% shed 2.2% to 8,303.80. The U.K’s FTSE 100 UKX, -0.70% dropped 1.2% to 6,044.97.

The euro EURUSD, -0.06% was trading at $1.1287, higher than $1.1258 late Friday in New York.

This week, investors will hear monetary policy decisions from the Bank of Japan and the Bank of England as well as the Fed.

Read:Here’s why government bonds are risky now

Movers: G4S PLC GFS, +1.41% shares lost 5% after the security firm confirmed that Omar Matteen, the suspect in Sunday’s shooting at an Orlando, Fla. nightclub, was an employee. G4S said it’s cooperating with law enforcement authorities in their investigation of the shooting that left 50 people dead, including Matteen.