London's FTSE 100 index of leading shares dropped 1.01 percent to 5,381.54 points, Frankfurt's DAX 30 shed 1.32 percent to 5,781.77 points and in Paris the CAC 40 decreased 1.29 percent at 3,125.24.

Asia-Pacific markets closed sharply lower, also in response to the Chinese data and after Moody's downgrade warning for France reignited concerns over the eurozone debt crisis. Tokyo shed 1.55 percent and Sydney slumped 2.07 percent.