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European stock markets mostly fell on Tuesday as investors balanced gloomy eurozone economic data against growing hopes of an interest rate hike from the European Central Bank, dealers said.
In midday deals, London's FTSE 100 index of top companies eased 0.04 percent to 6,455.27 points, the Paris CAC 40 slid 0.26 percent to 3,858.45 and Madrid's IBEX 35 slipped 0.38 percent to 8,422.60.
On the upside, Frankfurt's DAX 30 gained 0.55 percent to 7,916.10 points, boosted by resilient German labour market and consumer confidence data.
The euro meanwhile hit a ten-day peak at $1.3121 on hopes of an ECB rate hike this Thursday. It later stood at $1.3078, down from $1.3097 late in New York on Monday.
Investors are also awaiting the outcome of the US Federal Reserve's latest monetary policy meeting on Wednesday.
"The markets are discounting a cut in rates by the ECB given the downbeat economic data out of the eurozone," VTB Capital economist Neil MacKinnon told AFP.
"With the Fed likely to stay accommodative, equity markets can take encouragement despite a backdrop of economic uncertainty generally."
Eurozone unemployment hit a fresh record of 12.1 percent in March, official data showed on Tuesday, with 19.2 million people on the dole as recession continued to sap the economy.
The Eurostat data agency said an extra 62,000 people joined unemployment queues in the 17-nation eurozone as the jobless rate climbed for the 23rd consecutive month.
In the full 27-member EU, a total 26.5 million people were out of work in March, or 10.9 percent, as 69,000 extra workers went on the dole.
"UK equities have edged fractionally lower ... as traders weigh up valuations," said CMC Markets analyst Matt Basi.
"European unemployment data arrived in line with expectations which were set suitably low, and serve to remind us of the disparity in risk asset prices and macroeconomic conditions."
Data also showed that inflation across the 17-state eurozone eased further in April to 1.2 percent, comfortably below the ECB's target of near-but-below two percent.
"April's drop in eurozone inflation and the further rise in unemployment in March have added to the pressure on the ECB to provide more policy support," added Capital Economics analyst Jennifer McKeown.
In another heavy blow, separate data showed that Spain's economy shrank 0.5 percent in the first quarter of 2013, as a job-destroying recession gripped the struggling nation.
In company news, the London market won a modest boost from upbeat earnings.
BP shares jumped 3.66 percent to 473.45 pence after the British energy giant said net profits almost tripled in the first quarter of 2013, boosted by the sale of its stake in Russian joint venture TNK-BP.
Earnings after taxation surged to $16.86 billion (12.87 billion euros) in the three months to the end of March, compared with $5.77 billion in the same period of 2012.
In the bank sector, partly-nationalised Lloyds Banking Group revealed that it returned to profit in the first quarter on the back of higher income, deep cost-cutting and lower impairment charges.
In reaction, LBG shares rallied 4.38 percent to 55.841 pence and rival state-rescued lender Royal Bank of Scotland added 5.68 percent to 310.7 pence.
Asian equities mostly rose on Tuesday after another record close on Wall Street, while sentiment was also boosted by news that a new government had finally been formed in Italy after months of deadlock.
Tokyo fell 0.17 percent and Seoul rose 1.20 percent, while Sydney jumped 1.28 percent and Hong Kong added 0.69 percent. Shanghai was closed for a public holiday.