European stock markets dropped Tuesday following mixed eurozone data, while London's main index failed to gain following an upgrade of British economic growth.
London's benchmark FTSE 100 slid 0.88 percent to stand at 6,830.90 points in midday deals.
Frankfurt's DAX 30 index dropped 0.62 percent to 12,011.02 points and the CAC 40 in Paris retreated 0.29 percent to 5,068.94 points compared with Monday's close.
The euro fell to $1.0744 from $1.0825 late in New York on Monday.
"Mixed news, against the already volatile backdrop of Greek stagnation, provided a cocktail of negativity that was not only felt on the eurozone indices, but on the euro as well," said Connor Campbell, analyst at Spreadex trading group.
Deflation in the eurozone eased in March, official data showed Tuesday, reducing concerns that the economy faces a dangerous spiral after four straight months of falling consumer prices.
Another boost came from Germany, where unemployment fell in March to the lowest level since the country reunited in 1990, as the recovery in Europe's biggest economy continues to pick up speed.
But with a cash-strapped Greece in a bitter row with its European partners and on the cusp of tumbling out of the euro, analysts fear that a new debt crisis in the eurozone could affect the world economy.
In Britain, data showed its economy grew faster than expected in the final quarter of last year.
Gross domestic product expanded by 0.6 percent in the last three months of 2014, up from a previous estimate of 0.5 percent, the Office for National Statistics said in a statement.
The state of Britain's economy is in sharp focus as the country gears up for a general election in early May, while analysts said the outlook appeared less rosy.
"Combined with falls in construction output and industrial production, the economy contracted by around 0.3 percent in January," said Simon Wells, chief UK economist at HSBC.
"Unless there is a sharp bounce back, first-quarter growth could conceivably be around half its 2014 fourth-quarter rate. This is not good news for the government ahead of the 7 May election."
On the corporate front, shares in Kingfisher surged after Europe's biggest home-improvements retailer said it would close 60 stores in Britain and Ireland, a day after pulling out of a takeover for French chain Mr Bricolage.
The market cheered also the promise of dividend payments to shareholders.
Around midday, shares in Kingfisher were up 3.26 percent to 376.70 pence, topping the risers board on London's FTSE 100 index.