The FTSE 100 index dipped 0.11 percent to reach 5,204.24 points approaching midday trading in London.

Frankfurt's DAX 30 fell 0.41 percent to stand at 5,759.58 points and in Paris the CAC 40 slid 0.40 percent to 3,830.85 points nearing the half-way stage.

The DJ Euro Stoxx 50 index of top eurozone shares declined 0.51 percent to 2,899.54 points.

"Shares in London are under a bit of pressure, easing back after yesterday's one-year high for the FTSE 100," said IG Index sales trader Philip Gillett.

European markets had rallied on Monday, with London closing at the highest level since September, 2008, as Britain unveiled plans for a massive sell-off of state assets to reduce its debt.

A forecast that Britain would experience low interest rates for the next five years also boosted share prices, traders said.

On Tuesday, investors digested data showing British annual inflation slid to a five-year low of 1.1 percent in September.

"Looking ahead to the US open ... it will probably be the earnings announcement of Johnson & Johnson that influences early sentiment," said Gillett.

US health care giant Johnson & Johnson is to unveil third-quarter earnings ahead of the Wall Street open. Following the US close on Tuesday, US computer chip group Intel will post its results for the July-September period.

US stocks mostly rose on Monday as investors prepared themselves for another set of key corporate results from companies in the world's biggest economy.

Earlier on Tuesday, Tokyo's benchmark Nikkei-225 index closed up 0.60 percent to 10,076.56 points as investors returned to work after a long holiday weekend in Japan.

The third-quarter earnings season is being closely watched as major economies look to recover from recession.

US aluminium giant Alcoa kicked off the latest results season last week by announcing a surprise swing into profit during the three months to September 30 after three consecutive quarters of losses.

Other blue-chip companies due to report their third quarter results this week are JPMorgan Chase, Citigroup, Goldman Sachs, Google, IBM, Bank of America and General Electric.

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