NEW YORK (CNN/Money) - European shares closed lower on Monday, hurt by highly-leveraged utilities and transport services amid worries companies like Suez and Autostrade may have to start paying higher interest rates.

Pharmaceutical heavyweights helped stem market losses though, with GlaxoSmithKline and AstraZeneca jumping over 4 percent each as news that a major U.S. drug may be safe enough to return to the market lifted hopes that recent safety fears across the industry may have been overdone.

In Asia, stock finished mostly on the upside as South Korean and Taiwanese investors shrugged off last week's tech losses on Wall Street.

U.S. financial markets were closed Monday for the President's Day holiday.

When stock trading resumes in the United States Tuesday, investors will be awaiting key numbers on inflation, due later in the week, which could unnerve the market.

In Europe, rate worries weighed on utilities like France's Suez, Germany's E.ON and Spain's Iberdrola, which were down between 3 and 4 percent each on worries they would have to pay more interest on their debt.

High government bond yields also depressed most major stock markets despite a rally in drug industry stocks.

The FTSEurofirst 300 index of pan-European blue chips ended 0.1 percent lower at 1,098.5 points in relatively light volumes. The narrower DJ Euro Stoxx 50 index was 0.27 percent weaker at 3,063.64 points.

Around Europe, London's FTSE 100 index ended 0.1 percent firmer, while Paris's CAC 40 shed 0.16 percent and Frankfurt's DAX trimmed 0.14 percent. The Swiss Market Index added 0.45 percent in Zurich.

Switzerland's Novartis unveiled acquisitions in Germany and the United States costing more than $8 billion, which could transform it into the world's leading maker of generic drugs.

And drug stocks in Europe were still benefiting from news late Friday that experts had said Merck & Co.'s withdrawn painkiller Vioxx was, despite its risks, safe enough to be sold in the United States.

"There's a feeling there may have been an overreaction to the whole Vioxx situation," one dealer told Reuters.

In Asia, South Korean stocks rose 0.5 percent to a five-year high Monday, driving Asian shares excluding Japan to a seven-year peak, after a fund invested $975 million in Korean conglomerate LG Corp and its phone and appliance unit, LG Electronics Inc.

Japanese drug makers rose on reports that Sankyo Co. and Daiichi Pharmaceutical Co. plan to merge, offsetting falls in technology stocks to leave the Nikkei average down just slightly.

The Nikkei stock index closed down less than 0.1 percent as weakness in tech issues offset a 4.7 percent rise in Daiichi and a 4.9 percent jump by Sankyo.

Taiwan shares rose 0.5 percent while Hong Kong shares were flat as investors awaited the city's first auction of commercial land in three years Tuesday. Singapore shares fell 0.3 percent.

In currency trading, the dollar was fairly steady, gaining a bit on the euro but edging down against the yen.

The euro bought 1.3057, down slightly from $1.3063 late Friday. The dollar bought ¥105.52, down from ¥105.70 late Friday.

"Everyone is uncertain. We have had a very big selloff in the dollar and then the dollar steadied and people are unsure whether it is going back up or is this just a temporary pause in the downtrend," Lee Ferridge, senior proprietary trader at Rabobank in London, told Reuters.

In London, Brent Crude oil climbed 70 cents to $47.04 a barrel over continued concerns of a future OPEC production cut.

Gold edged lower in London, trading at about $427 an ounce -- down marginally from Friday's close. New York gold trading remained closed.