LONDON (The Deal) -- European stocks were lower on Tuesday as a key indicator of German economic sentiment stoked worries of a slowdown in Europe's largest economy. Trading remained volatile ahead of Thursday's interest rate-setting meeting in the U.S.

 In London, the FTSE was down 0.61% at 6,047.64, while in Frankfurt the DAX shed 0.18% to 10,113.34 and in Paris the CAC 40 was down 0.01% 4,517.52. 

The selloff was sparked in part by another down day in China, where the Shanghai Stock Exchange Composite Index retreated 3.52% to 3,005.17, mainly on concerns the state won't be able to do enough to put the economy back on solid footing. 

Investors are also hesitant to start buying again amid uncertainty over the Federal Reserve's next move. 

On this side of the Atlantic, the ZEW Indicator of Economic Sentiment for Germany, which seeks to predict economic development six months in advance, fell to 12.1 points in September from 25 points in August. For the common-currency zone as a whole, the indicator fell by 14.3 points to a reading of 33.3. 

In the U.K. a return to zero inflation did little to buoy investor sentiment. The Office for National Statistics reported that the Consumer Price Index was unchanged in August, down from 0.1% in July, as cheaper motor fuels and a smaller rise in clothes prices offset rising prices for soft drinks and furniture. 

In Stockholm, Hennes & Mauritz slumped 1.61% after Europe's second-largest clothing retailer said that sales in August grew by only 1%, its slowest monthly growth in more than two years. The retailer blamed unseasonably warm weather in many of its large European markets for the slowdown. 

Leading London stocks lower, mining company Glencore slumped 6.2% while home-improvement retailer Kingfisher  (KGFHY) fell 2.7% on disappointing results. 

Ocado Group  (OCDGF) was also down, falling 0.28%. The stock pared earlier gains after posting quarterly sales roughly in line with expectations. Retail sales rose 15.3% in the 12 weeks ended Aug. 9 to GBP 252 million ($388.9 million). 

During a conference call, Ocado CFO Duncan Tatton-Brown confirmed that talks are continuing with international grocers interested in licensing Ocada's technology to expand their own online offerings. 

Spain's Inditex, Europe's biggest fashion retailer and owner of the Zara and Massimo Dutti chains, is due to report first-half earnings on Wednesday. 

In Paris, Elecricité de France was down 4.63% on a ratings downgrade from Morgan Stanley.

Among risers, carmakers Bayerisch Motoren Werke was up 1.10% while France's Peugeot  (PUGOY) accelerated 0.90% on a report of rising car sales in Europe. 

Registrations in 32 European countries -- the EU's 28 countries plus Iceland, Liechtenstein, Norway and Switzerland -- rose to 781,676 in August from 701,251 a year earlier, an 11.5% jump the Brussels-based European Automobile Manufacturers Association said in its latest report. Sales from January through August rose 8.6% to 9.38 million vehicles. 

In Amsterdam, Royal Philips  (PHG - Get Report)  was up 0.42% ahead of a strategy update in London. 

Before the meeting, CEO Frans van Houten said in a statement that the company was "well on track" to spin off lighting and combine its consumer and lifestyle activities into a single HealthTech unit. He and CFO Ron Wirahadiraska are scheduled to give an update on the separation process and on the group's financial performance during the event. 

And in Abu Dhabi, Emirates Telecommunications Group Co. PJSC, or Etisalat, rose 2.1% on the first day foreign investors were allowed to trade shares directly. 

Asian stocks were mixed, with the Hang Seng down 0.49% to 21,455.23 in Hong Kong and the Nikkei adding 0.34% to 18,026.48 in Tokyo.

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