European stocks were expected to open lower on Tuesday after German Finance Minister Wolfgang Schaeuble zapped investor optimism by warning on Monday there would be no rapid solution to the sovereign debt crisis within the euro zone.
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The FTSE is called 43 points lower, the DAX in Frankfurt is expected to open down by 58 points and the CAC 40 is predicted to be lower by 25 points.
Schaeuble said that while European governments were working to adopt a five-point platform to ease the debt crisis, there would be no definitive solution until the European Union summit on October 23.
The CBOE Volatility Index (VIX) rose by 18.2 percent to 33.39 following his remarks, the highest single day increase since August.
In Asia overnight, investor sentiment was hit by the German Finance Minister's comments and worse-than-expected GDP data from China, showing the Chinese economy grew at its slowest pace since the second quarter of 2009.
Former vice-minister of commerce and senior adviser at a government think tank, Wei Jianguo told the China Daily that the nation could experience its first trade deficit for two decades next year due to the crisis in Europe and the broader global economic slowdown.
There was more bad news for Europe late on Monday as credit rating agency Moody's warned it may place a negative outlook on France's Aaa credit rating in the next three month depending on the extent to which bank bailouts and euro zone aid contributions dent the nation's budget.
European Central Banker Juergen Stark seemed to reiterate outgoing ECB head Jean Claude Trichet's comments last week that the central bank has done all it can to resolve the issue of sovereign debt and the onus is now on indebted nations to drive down their deficits.
The 2012 draft budget bill presented to the Portuguese parliament on Monday is likely to see the Iberian nation fall into its deepest recession since it returned to democracy in 1974 as the government looks to impose tough austerity measure to drive down national debt. Portuguese trade unions called on Monday for a general strike to protest against the spending cuts.
Protesters in Londonwill camp for a fourth day outside St Paul's Cathedral in the city's financial district on Monday, while in Greece a 48-hour strike by ferry workers will enter its second day.
French food producer Danone said it would deliver strong growth this year, despite a slowdown in sales growth in the third quarter. Danone, which produces Evian water and Actimel yogurt, achieved growth of 5.9 percent in the third quarter, slightly higher than analysts expectations of 5.6 percent. Sales reached 4.8 billion euros ($6.61 billion) rising 10.5 percent, in line with analysts expectations.
Luxury firm LVMH reported third quarter sales figures before the start of trade on Tuesday, showing a 15 percent rise in like-for-like sales to 16.3 billion euros ($22.46 billion).
Christian Dior will also release third quarter sales data on Tuesday.
Restaurant and hospitality firm Whitbread reported better-than-expected pretax profit for the first half of 2011 and increased its interim dividend by 50 percent on Tuesday. Pretax profit rose by 15.2 percent to £174.9 million ($276 million) to September 1.
Mining firm Xstrata is also set to announce third quarter trade figures on Tuesday.
Whitbread CEO Andrew Harrison will appear on Squawk Box Europe at 8:00 London time.