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London - European stocks fell on Tuesday after a positive start, as traders reacted to a drop in German investor confidence, before the week's key event surrounding the outlook for US interest rates.
London's benchmark FTSE 100 index fell 0.62% to stand at 6 117.76 points in midday deals and after official data showing British inflation fell back to zero in August.
In the eurozone, Frankfurt's DAX 30 slid 0.85% to 10 123.56 points and the CAC 40 in Paris shed 1.04% to 4 548.72 compared with Monday's close.
In foreign exchange activity, the euro gained to $1.1324 from $1.1317 late on Monday in New York.
"The latest wave of European data was no friend to the (stock) markets," said Connor Campbell, analyst at Spreadex trading group.
"The day's data doesn't slow down... with a wave of US figures that will not doubt provide little clarity as to what the Fed will do on Thursday.
"Retail sales growth is expected to have halved, whilst industrial production is expected to turn negative," Campbell added.
US indices finished lower Monday as traders looked ahead to a Federal Reserve meeting when it wraps up Thursday which could result in its first interest rate hike in more than nine years.
In Europe, investor sentiment has slumped in Germany this month over concerns that sharply slowing growth in emerging markets will hurt the vital export sector of the eurozone's top economy, a leading survey said Tuesday.
The widely watched investor confidence index calculated by the ZEW economic institute sank 12.9 points from August to stand at just 12.1 points - a level not seen for almost a year and far short of analysts' expectations.
"September's ZEW survey confirmed that recent market turmoil and concerns over the global environment have had an adverse impact on German investor confidence," said Jonathan Loynes, chief European economist at research group Capital Economics.
Analysts were quick to point out however that the German economic engine was in good shape overall and that weakness in demand from China could increasingly be compensated by growth in Europe and the United States.
In Asia trading on Tuesday, Tokyo won 0.34%, closing higher for the first time in four sessions after the Bank of Japan refrained from unleashing fresh monetary stimulus amid unease over much of the world economy.
Despite Tokyo's bounce, lingering concerns about the state of China's economy dragged down shares in Shanghai and Hong Kong.
The car manufacturing sector was meanwhile in focus on the corporate front with the IAA auto show on in Frankfurt and as US giant Ford said it has no concrete time schedule for when it aims to return to profit in Europe.
At the IAA show, BMW chief executive Harald Krueger, 49, fainted during a press briefing. He was feeling better but canceled all appointments for the rest of the day, a company spokesman said.
BMW shares were up 0.11% at 85.62 euros in early afternoon deals.
