European stocks fall on fears that the recent rally in stock price was excessive.

Last week, the European indices rose and completely leveled the drop since June 24, when the results of the referendum were announced in the UK, where the country's citizens voted for withdrawal from the EU.

Meanwhile, investors fears about a slowdown in the European economy and efficiency of the European Central Bank measures.

Focus was also on the UK inflation data and indexes in the business environment sentiment from the ZEW Institute in Germany and the euro zone.

In the UK, inflation increased slightly in July to its highest level since November 2014, showed data of the Office for National Statistics on Tuesday. Consumer prices rose 0.6 percent year on year in July, after rising 0.5 percent in June. Economists had forecast that inflation will remain at 0.5 percent. On a monthly basis, consumer prices fell by 0.1 percent, as expected, which was the first drop in six months. In June, prices rose by 0.2 percent. Core inflation, which excludes energy, food, alcoholic beverages and tobacco, slowed slightly to 1.3 percent in July compared with 1.4 percent in June.

Economic sentiment in Germany improved in August, showed results of a survey by the Centre for European Economic Research (ZEW) on Tuesday. The index of sentiment in the business environment from the ZEW Institute in Germany rose less than expected to 0.5 in August from -6.8 in July. The index was expected to rise to 2 in August. Similarly, current conditions rose to 57.6 compared to 49.8 in July. Economists had forecast that the indicator improved to 50.2.

"The indicator of economic sentiment from the ZEW partially recovered from Brexit shock," said ZEW President Achim Wambach. "Political risks within and outside the European Union, however, continues to hamper a more optimistic economic outlook in Germany. In addition, uncertainty about the stability of the EU banking sector is maintained," said Wambach.

The composite index of Europe's largest enterprises Stoxx 600 fell by 0.2% - to 345.49 points.

Swedish Electrolux AB fell 2.2% on the majority of sales of household appliances in the US fell in July. The company gets more than a third of revenue in the US market.

The cost of Schindler Holding AG shares fell 3.7%. The Swiss company has given a negative outlook for the world market of elevator and escalator equipment.

The capitalization of Linde AG jumped 6% on rumors that Praxair Inc intends to acquire the German manufacturer of industrial gases.

Shares of mining company Antofagasta rose by 4%. The company reported an increase in profits in the first half.

Quotes of Svenska Handelsbanken AB securities dropped to 1.7% after one of the largest Swedish bank dismissed its CEO Frank Vang-Jensen.

Rotork Paper Industry slowed down 2.8%, the most among Stoxx 600 components, after HSBC downgraded the rating.

Swiss Geberit shares rose 4.8% to a record peak, as the quarterly results of the manufacturer of sanitary ware was better than expected.

Shares of St. James's Place PLC tumbled 1.2% after the asset management company reported a slight decline in profit for the last six months compared to the same period last year, but 15% increase in dividend payments.

At the moment:

FTSE 6934.00 -7.19 -0.10%

DAX 10709.85 -29.36 -0.27%

CAC 4494.94 -2.92 -0.06%