LONDON (TheDeal) -- Exporters led European stocks lower on Tuesday after China's surprise currency devaluation, as an unexpected fall in German investor confidence stoked concerns about the pace of recovery in Europe's largest economy.

In London, the FTSE 100 was down 0.67% at 6,691.31, while in Frankfurt, the DAX shed 1.22% to 11,463.70. In Paris, the CAC 40 was lower by 1.11% at 5,137.71.

The main benchmark indices retreated after China's central bank devalued the country's tightly controlled currency by nearly 2% after a barrage of disappointing economic news over the weekend.

Closer to home, European markets were also rattled by a 4.7-point drop in Germany's ZEW Indicator of Economic Sentiment to a reading of 25 in August.

In Greece, it was a different story as an overnight agreement with creditors on a third bailout for the Mediterranean country buoyed the Athens Composite Share Price Index by 1.8%.

Elsewhere in the region exporters led declines, with German carmakerBayerische Motoren Werke (BAMXY) falling 3.6%, and personal-care products company Beiersdorf (BDRFF) retreating 1.36% in Frankfurt.

Among luxury goods makers, Burberry (BBRYF) erased 2.61% in London while LVMH Moët Hennessy Louis Vuitton (LVMUY) was nearly 3.8% lower in Paris.

Export-heavy drug makers were also lower, with Henkel (HENOY) down 0.68%, Bayer (BAYRY) - Get Report 0.83% lower and Merck (MKGAY) down 0.51% in Frankfurt.

For Merck, the currency developments offset the company's announcement about clearing the final antitrust hurdle for its $17 billion acquisition of Sigma-Aldrich (SIAL) , with an unconditional nod from Brazil's Council for Economic Defense. Merck said it expects to complete the deal in the third quarter.

In Helsinki, deal momentum lifted crane maker Konecranes (KNCRF) by 22% on an agreement to merge with Westport, Conn.-based Terex (TEX) - Get Report. The all-stock deal will create a new global giant with $10 billion in combined 2014 sales.

Terex shareholders will own 60% of the new Konecranes Terex, which is to be led by Terex's current CEO Ron DeFeo serving in the same capacity.

Elsewhere in the region, disappointing results put pressure on individual stocks.

In Zurich, Adecco (AHEXF) fell 3.47% after the world's largest provider of temporary workers posted second-quarter profit that fell below expectations.

Net income rose 22% to €177 million, undershooting the €182.6 million average predicted in a Bloomberg News analyst pool. However, Adecco stuck to its full-year target of 5.5% for earnings before interest, taxes, depreciation and amortization, saying it expects a pick-up in the second half.

GAM Holding (GMHLF) fell 5.42% after the Swiss asset manager posted a 3% decline in first-half profit and said it would cut its workforce by about 15% over the next 18 months.

And in Amsterdam, insurer Delta Lloyd (DLLLF) slumped 13.87% as a decline in its solvency ratio overshadowed strong commercial and operational results.

In a statement, executive board chairman Hans van der Noordaa said that Delta Lloyd's capital position and managing risk are a top priority, and that the company is on track to present the results of its strategic review in December.

Asian stocks were mostly lower, with Tokyo's Nikkei falling 0.42% to 20,720.75 and Hong Kong's Hang Seng down 0.09% to 24,498.21.