London - European stocks sank on Tuesday as slumping German industrial output deepened concerns about possible eurozone recession, with markets also rocked by Europe's first home-grown case of Ebola in Madrid.
Investors were on edge too as jihadists waged fierce battles against Kurdish militia in the key Syrian town of Kobane on the Turkish border, and as fresh US-led air strikes bombarded positions held by the self-styled Islamic State.
Frankfurt's benchmark DAX 30 index shed 0.79 percent to 9,136.63 points in midday deals and the Paris CAC 40 fell 1.05 percent to 4,241.63 compared with Monday's closing level.
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Spain's IBEX 35 plunged 1.58 percent to 10,477.90 points as the government confirmed that a Spanish nurse has contracted the Ebola virus in a Madrid hospital.
London's FTSE 100 dipped 0.60 percent to 6,524.40, with losses capped by news that miner Rio Tinto had rejected a blockbuster merger from Glencore.
The European single currency slid to $1.2631, from $1.2655 late in New York on Monday.
Recession fears in eurozone
Markets were sent into a tailspin after official data showed that German industrial output shrank 4.0 percent in August, after rising by 1.6 percent in July.
That fuelled concern over the health of the powerhouse German economy and sparked worries of a new recession in the eurozone, dealers said.
"European stocks are lower today after a much-worse-than-expected industrial production print from Germany, the economic powerhouse of the eurozone, raised fears about a recession in the single currency bloc," said analyst Fawad Razaqzada at Forex.com.
"This was the biggest monthly decline in more than five years, suggesting the industrial sector may already be in recession, or at best very close to it. This is obviously bad news for German stocks."
Tuesday's dire figures came one day after news of a 5.7-percent slump in factory orders in Germany.
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"Once again it's the eurozone that causing the biggest concerns after the latest data from Germany provided further evidence that the economy is struggling to recover from the summer lull," added analyst Craig Erlam at trading firm Alpari.
Madrid stocks were hammered as the European Union asked Spain to explain how a nurse treating Ebola patients in Madrid contracted the deadly disease, in the first known case of transmission outside Africa.
Bucking the downward trend in London, shares in Rio Tinto rallied after the Anglo-Australian miner revealed it had rejected a merger bid from Swiss rival Glencore earlier this year.
Rio Tinto's share price jumped 4.70 percent to 3,138 pence after the group said in a statement Glencore had made a merger approach in July 2014 that it had rejected.
The group also confirmed there were no ongoing talks with Glencore about such a bid, which would have created the world's biggest mining firm worth an estimated US$160 billion.
US earnings in focus
Asian stocks were mixed on Tuesday, taking a lead from Wall Street ahead of the start of the corporate reporting season, which will be kicked off by aluminium giant Alcoa on Wednesday.
"Alcoa is first out of the starting blocks tomorrow and whilst it is not the bellwether stock it once was, it does provide some insight for the wider market," said Rebecca O'Keeffe, Head of Investment at stockbroker Interactive Investor.
"The most eagerly awaited (US) results are the big banks and technology giants, who start announcing their third quarter results next week."
Tokyo fell 0.67 percent and Sydney slipped 0.16 percent, while Seoul added 0.23 percent.
Hong Kong enjoyed a third straight rally, gaining 0.46 percent, as a protest that hit the city last week winds down.
In foreign exchange deals in London on Tuesday, the euro eased to 78.51 British pence from 78.68 pence, while the pound firmed to $1.6087 from $1.6084.
The yen firmed against leading currencies as the Bank of Japan held steady on its easy-money policy.
The price of gold advanced to $1,209.64 per ounce on the London Bullion Market, from $1,195.75 on Monday.