European stock markets fell Tuesday, with banking shares posting steep losses on fears that euro-zone leaders may not be able to substantially contain the bloc's sovereign debt crisis, while resource shares slumped after data showed slowing growth in China.

At 0755 GMT, the Stoxx Europe 600 index was down 1.1% at 233.44. London's FTSE 100 was down 1.4% at 5362.29, Frankfurt's DAX was 1.3% lower at 5785.89 and Paris's CAC-40 was 1.9% lower at 3127.23.

Banking stocks felt the pinch of Tuesday's selloff, as recent confidence that euro-zone leaders had made progress in working out a solution to the debt crisis were dashed Monday after Germany tempered expectations that European Union leaders will deliver a comprehensive plan to resolve the region's debt crisis at the Oct. 23 summit. The Stoxx Europe 600 banks index lost 1.8%.

"This highlights that sentiment remains vulnerable on any disappointment of under-delivery at the summit and event risk still dominates the market," said Credit Agricole.

It added that perhaps such comments [from Germany] reflect an effort to manage expectations a little lower, but it is not only the financial markets waiting for a grand solution. "The comments from this weekend's Group of 20 summit suggest most outside of Europe are also impatient and expectant of some greater initiative," said Credit Agricole.

Adding further pressures were worries over the French economy after Moody's Investors Service put France on three months notice that "pressure from weaker debt metrics," could leave the country with a negative credit outlook, even a downgrade. "Given most are expecting some tough economic quarters ahead, the situation is fairly delicate especially considering France is only a few months away from a major election," said Deutsche Bank's strategist Jim Reid.

Elsewhere, resource stocks slumped amid falling metal prices after data showed the Chinese economy is slowing. China's third-quarter gross domestic product data showed the economy grew 9.1% from a year earlier, slowing down from an expansion of 9.5% in the second quarter and below economists' expectations for a 9.2% rise. As a result, the Stoxx Europe 600 basic resource index slipped 3.3%.

In Europe, earnings were a mixed bag. Shares in French food company Danone rose 1.8% after it reported an 11% rise in third-quarter sales and said it was on track to meet its financial targets for the year and is confident about 2012, with operations in Asia, Latin America, and Africa/Middle East continuing to post robust growth. Shares in Anglo-Swiss miner Xstrata, however, fell 4.7% despite reporting record third-quarter thermal coal output, as the company put weather-related production setbacks from earlier in the year behind it. The miner said its mined copper output suffered from lower ore grades, blizzard conditions and repairs to equipment, which reduced performance.

Focus now falls on earnings from U.S. banking giant Goldman Sachs, together with other high profile blue-chip names such as Apple, Bank of America, Intel Corp. and Coca Cola, all due later in the global session. International Business Machines Corp. Monday reported a 7% increase in third-quarter earnings and also raised its 2011 outlook, but said the stronger dollar chipped away at its backlog and revenue.

In Asia, stock markets dropped Tuesday as a slowdown in China's economy added to fresh concerns about the ability of Europe's leaders to substantially contain the euro-zone debt crisis.

Japan's Nikkei Stock Average fell 1.6%, while Australia's S&P/ASX 200 slid 2.1% and South Korea's Kospi Composite lost 1.4%. China's Shanghai Composite shed 2.3%, while Hong Kong's Hang Seng Index fell 4.7%, hit after China's third-quarter gross domestic product data.

In the currency markets, the euro eked out modest gains against the dollar and the yen after falling sharply Monday amid receding hopes for a near-term resolution to euro-zone's debt woes. "The currency market is likely to settle into a holding pattern ahead of the EU summit this weekend. But it remains an environment in which we believe the risks for the euro are skewed to the downside," said Credit Agricole.

By 0751 GMT, the single currency was at $1.3704, from $1.3737 late Monday in New York, while the dollar was at Y76.82, from Y76.83. In other assets, spot gold was at $1,666.00 a troy ounce, down $10.60 from New York Monday. November Nymex crude oil futures were off 87 cents at $85.93 a barrel and December Brent oil futures were 66 cents lower at $109.50. The December bund contract was up 90 ticks at 135.52.

In Tuesday's economic and corporate agenda, attention will be on consumer price inflation figures from the U.K. at 0830 GMT. The highlight in Europe will be Germany's ZEW economic sentiment survey at 0900 GMT, while in the U.S., produce price index data is due at 1230 GMT. Markets will also be keenly awaiting the results of Spanish and Greek debt auctions, due 0830 GMT and 0900 GMT respectively.