European equities slid Tuesday on news of falling investor sentiment in eurozone powerhouse Germany, and in cautious deals before more US bank results, dealers said.
In late morning trading, London's FTSE 100 fell 0.12 percent to 6,738.15 points, Frankfurt's DAX 30 shed 0.41 percent to 9,742.44 points and the Paris CAC 40 lost 0.34 percent to 4,335.15.
Milan stocks dropped 1.10 percent and Madrid sank 1.16 percent, while Lisbon was down 0.72 percent in value.
"Financial investors are becoming more cautious in their assessment of the German economy and its prospects," said Barclays analyst Thomas Harjes.
Investment sentiment in Germany fell to the lowest level for 19 months in July amid signs of a dent in activity in Europe's top economy, a survey found Tuesday.
The widely watched investor confidence index calculated by the ZEW economic institute fell by 2.7 points to 27.1 points in July, it said in a statement.
Analysts had been projecting a shallower drop to 28 points this month. The index now stands at its lowest level since December 2012.
"July’s fall in German ZEW investor sentiment adds to signs of a slowdown in the eurozone’s largest and strongest economy," said economist Jennifer McKeown at the Capital Economics research consultancy in London.
In reaction, the European single currency dipped to $1.3595 from $1.3619 late in New York on Monday.
Later in the day, meanwhile, traders will switch focus to another batch of US banking results, including titan Goldman Sachs.
"European stocks are ... giving back some of the gains achieved yesterday," said Spreadex analyst Lee Mumford.
He added: "Investors will be focused on the economic data heavy day combined with large blue-chip corporations reporting their earnings.
"We will see the likes of Goldman Sachs and JPMorgan Chase reporting earnings before the bell whilst Intel and Yahoo report after the US close."
In Lisbon, shares in BES bank again fell heavily on concerns that one of the bank's holding companies is at risk of default.
Wall Street bounded higher on Monday thanks to better-than-forecast earnings from banking giant Citigroup, which was described by Wall Street rival Bank of America Merrill Lynch as "encouraging for large peers that report earnings this week".
Asian equities mostly rose Tuesday, taking their lead from a second straight advance on Wall Street, while investors await a string of market-moving news and data over the next few days.
Hong Kong added 0.49 percent, Tokyo rose 0.78 percent, Seoul jumped 0.94 percent and Shanghai 0.18 percent, while Syney was flat.
The British pound firmed to $1.7136 from $1.7083 on Monday, as investors shrugged off a surprise jump in inflation. The euro eased to 79.32 pence from 79.71 pence.
In commodity deals, gold advanced to $1,313.78 per ounce from $1,306 on Monday.