(MENAFN- AFP) European stock markets fell further Tuesday, with the airlines sector facing heavy selling pressure after Air France-KLM slashed its profits outlook.
London's benchmark FTSE 100 index fell by 0.75 percent to stand at 6,772.15 points in afternoon trade.
Frankfurt's DAX 30 lost 0.63 percent to 9,843.79 points and in Paris the CAC 40 slid 0.69 percent to 4,375.56 compared with Monday's close.
Madrid's IBEX 35 index shed 1.33 percent to 10,744.2 points and Milan lost 1.89 percent.
"European stock markets fell on Tuesday as investors demonstrated caution ahead of the start of the second quarter earnings season," said Daniel Sugarman, analyst at traders ETX Capital.
"Equity markets are now drifting away from last week's highs with attention focused on corporate results for a fresh viewpoint on the state of the health of the US economy."
Investors are also hoping to get a better handle on the state of the global economy with the release this week of Chinese economic data as well as minutes from the Federal Reserve's most recent policy meeting.
After a long Independence Day weekend US shares returned on Monday for the first time since Thursday's better-than-expected jobs report.
However, they ended in the red on profit-taking, with the losing streak continuing on Tuesday. Dow Jones opened down 0.16 percent and Nasdaq lost 0.19 percent.
- Pound retreats -
On foreign exchange markets Tuesday, the European single currency dipped to $1.3595 from $1.3604 late on Monday in New York.
The euro slipped to 79.41 pence from 79.42 pence, after sinking to a two-year low on Monday.
The pound meanwhile dropped to $1.7119 on Tuesday, from $1.7128 the day before - moving further away from recent six-year high points.
The British currency has been rising strongly in recent weeks on market expectations that the Bank of England will move soon to raise its main interest rate from a record-low level of 0.50 percent.
But official data released Tuesday dampened those expectations after it was revealed that British industrial output had unexpectedly fallen in May.
Output fell by 0.7 percent in May compared with a gain of 0.3 percent in April, the Office for National Statistics said.
Analysts' consensus forecast was for another gain of 0.3 percent in May, according to a survey by Dow Jones Newswires.
- Airlines hit turbulence -
On the corporate front Tuesday, shares in airlines fell sharply after Air France-KLM slashed its earnings forecast for 2014, hit by over-capacity in traditionally lucrative long-haul routes and persistently weak cargo demand.
Europe's second biggest airline after Lufthansa said underlying pre-tax profits would now reach around 2.2 billion and 2.3 billion euros ($3.0 billion and $3.1 billion), rather than 2.5 billion euros previously forecasted.
Shares in the company dived 7.84 percent to 8.66 euros and dragged down the sector.
IAG, owner of British Airways and Spain's Iberia, slumped 6.17 percent to 338.9 pence, Easyjet lost 4.08 percent to 1,271.00 pence and Lufthansa gave up 2.91 percent to 15.165 euros.
On the London Bullion Market, the price of gold climbed to $1,318.25 an ounce from $1,313 on Monday.
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