European stocks fell, after the Stoxx Europe 600 Index rallied the most in a month, on concern that the U.S. Federal Reserve will reduce debt purchases as the world's biggest economy strengthens.

German unemployment in May rose more than four times as much as economists estimated as the euro area's sovereign debt crisis and a long winter took their toll on Europe's largest economy.

The number of people out of work climbed a seasonally adjusted 21,000 to 2.96 million, the Nuremberg-based Federal Labor Agency said today. That's the fourth straight monthly gain. Economists had predicted an increase of 5,000, according to the median of 35 estimates in a survey. The adjusted jobless rate held at 6.9 percent, just above a two-decade low of 6.8 percent.

The International Monetary Fund lowered its forecasts for China's growth to about 7.75 percent this year and next. In April, the IMF predicted growth of 8 percent this year and 8.2 percent in 2014.

National benchmark indexes declined in all 18 western-European markets today. The U.K.'s FTSE 100 retreated 2 percent, Germany's DAX lost 1.7 percent and France's CAC 40 dropped 1.9 percent.

Peugeot slid 4.2 percent to 7.05 euros. The carmaker is discussing an eventual capital increase, La Tribune reported, citing an unidentified person close to the matter. The Peugeot family has discussed what percentage of dilution would be acceptable for them, according to the newspaper.

H&M slipped 2.5 percent to 232.60 kronor in Stockholm. Goldman Sachs downgraded its rating on the shares to sell from neutral, with analyst Franklin Walding saying profitability at Europe's second-largest clothing retailer will suffer as customers shift to online shopping.

De La Rue Plc, the world's largest banknote printer, fell 4.1 percent to 946 pence, its biggest decline in six months. Revenue dropped to 484 million pounds in the full year through March, less than the 509 million-pound profit analysts had predicted.