LONDON, Sept 14 (AFP) - European stock markets drifted lower on Tuesday as Wall Street put in a cautious morning performance in reaction to weaker than expected US data and a fresh rise in crude prices, dealers said.
The London FTSE 100 index fell 0.28 percent to close at 4,545.6 points, the Frankfurt DAX 30 slipped 0.14 percent to 3,947.75 points and the Paris CAC 40 dropped 0.47 percent to 3,708.03 points.
The DJ Euro Stoxx 50 index of leading eurozone shares shed 0.33 percent to end at 2,771.67 points.
The euro rose to 1.2271 dollars, boosted by US data published Tuesday showing a record current account deficit of 166.2 billion dollars in the second quarter.
European sentiment also wilted on the findings of the ZEW research institute, which said its index of German economic expectations fell 6.9 points in September from August to 38.4, the lowest level since June 2003.
On Wall Street, by London's close, the Dow Jones Industrial Average was off early lows but still down 9.30 points at 10,305.50, while the tech-rich Nasdaq composite index shed 3.93 points to 1,906.45.
Equity markets were impacted by a fresh rise in crude prices on the threat posed to supplies by Hurricane Ivan, and another oil pipeline fire in Iraq, a day ahead of an OPEC meeting to discuss the supply problem.
Weaker-than-expected US data also undermined sentiment as investors strove to assess whether there could be any impact on next week's Federal Reserve interest rate decision.
US retail sales fell 0.3 percent in August, the third decline in the past five months, the Commerce Department estimated Tuesday.
Economists were expecting a smaller decline of 0.1 percent for total sales, but the figure was closer to expectations after taking account of an upward revision in July from 0.7 percent to 0.8 percent.
Meanwhile, the US current account deficit widened to a record 166.2 billion dollar in the second quarter, from a 147.2 billion gap in the first quarter, according to the Commerce Department.
In London, weakness in mobile telecom issues weighed on blue-chip sentiment today after Citigroup Smith Barney downgraded both Vodafone and mmO2 to "sell" from "hold' in a European sector review.
The US broker argued that there was a trade-off between growth and margin and that there were risks in the mobile model that could hurt valuations over the next few quarters.
In reaction, heavyweight Vodafone shares topped the FTSE 100 fallers list, down three percent at 129.25 pence.
However, mmO2 shares rallied by the close to end flat at 94.5 pence.
In France, Vivendi Universal shares dipped 0.83 percent to 21.52 euros after the French media giant raised its earning guidance for the full year, with adjusted net income now set to climb above one billion euros.
Elsewhere in Europe, the Swiss SMI index shed 0.62 percent to 5,538.5 points, the Amsterdam AEX fell 0.31 percent to 333.15, the Madrid Ibex-35 lost 0.35 percent to 8,091.9 and the Milan Mib30 dropped 0.26 percent to 5,538.5.
Bucking the trend, the Brussels Bel-20 rose 0.15 percent to 2,639.56.
Earlier in Asia, the Tokyo Stock Exchange's Nikkei-225 index gained 0.38 percent to 11,295.58 points on Tuesday and the Hong Kong Hang Seng Index closed up 0.06 percent at 13,148.06 points.