Forexpros - European stock markets were sharply lower on Tuesday, following the release of disappointing data on economic growth in Germany and the wider euro zone, while markets awaited a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy later in the day.
During European morning trade, the EURO STOXX 50 dropped 1.6%, France's CAC 40 slumped 1.55%, while Germany's DAX 30 tumbled 2.1%.
Preliminary data released earlier showed that German economic growth nearly stalled during the second quarter, increasing by a seasonally adjusted 0.1%, below expectations for a 0.5% increase.
A separate report said that the euro zone's gross domestic product increased by a seasonally adjusted 0.2% during the second quarter, slowing from growth of 0.8% in the preceding quarter and below expectations for a 0.3% gain.
The downbeat data added to worries over growth prospects for the single currency bloc amid the region's ongoing sovereign debt crisis.
Markets were awaiting a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris later in the day.
On Monday, German government spokesman Steffen Seibert said the introduction of euro bonds will not be on the agenda when the two leaders meet, while adding that the German government did not expect a major breakthrough.
Shares in German and French lenders were down ahead of the meeting, with BNP Paribas and Societe Generale dropping 1.4% and 1.2% respectively, while Deutsche Bank and Commerzbank retreated 1.7% and 3.3% in that order.
In London, the commodity-heavy FTSE 100 fell 0.9% as shares in raw material producers led losses, amid concerns over a slowdown in global demand.
Mining giants BHP Billiton and Rio Tinto saw shares slump 1.9% and 1.5% respectively, copper producer Xstrata dropped 1.7%, while oil major British Petroleum saw shares decline 1.4%.
Shares in the financial sector were also lower, with Barclays falling 1.7%, Royal Bank of Scotland shares declining 1.4%, while HSBC Holdings saw shares slip 0.85%.
Meanwhile, the outlook for U.S. equity markets was downbeat ahead of earnings reports from computer maker Dell, the largest U.S. home-improvement retailer Home Depot, as well as retail giant Wal-Mart.
The Dow Jones Industrial Average futures pointed to a loss of 1.05%, the S&P 500 futures dropped 1.25%, while the Nasdaq 100 futures retreated 1.3%.
Later in the day, the U.S. was to produce official data on building permits and housing starts, as well as reports on import prices, the capacity utilization rate and industrial production.