European stock markets fell from an 11-month high on Monday as investors started to focus on the U.S. Federal Reserve's policy meeting later this week. "After recent gains, investors are quite rightly proceeding with caution," said Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor, in a note. "Although the Federal Reserve meeting this week is almost certain to see the first U.S. interest-rate rise this year, what the Fed will do next year remains pivotal for markets," she added.

U.S. stocks struggled for direction on Monday, with the Dow notching the latest in a string of record closes, while the S&P 500 and Nasdaq finished lower. Major indexes had fluctuated between positive and negative territory with investors appearing reluctant to push shares higher following pronounced gains for Wall Street ahead of a key meeting by the Federal Reserve.

Asian shares were muted on Tuesday, with investors displaying caution ahead of the U.S. Federal Reserve meeting this week. The two-day Federal Open Market Committee meeting will kick off later in the global trading day, when U.S. central bankers will decide whether to raise interest rates. According to CME Group's FedWatch tool, the likelihood of a rate increase is 95.4%, up from 94.9% on Monday.