European stocks fell in choppy trade on Tuesday as a US-Israeli missile test rattled nerves and raised expectations of Western military action in Syria.
At close, London's FTSE 100 index dropped 0.58 percent to 6,468.41 points .
Frankfurt's DAX 30 fell 0.77 percent to 8,180.71 points and the CAC 40 in Paris sank 0.80 percent to 3,974.07 points.
European markets have had a slightly less exuberant air about them today after the strong gains of yesterday as nervousness about the situation in the Middle East spilled over on reports of two ballistic missiles being fired in the Mediterranean, caused markets to slump sharply in the morning session," said Michael Hewson of CMC MArkets.
"Markets did regain their equilibrium somewhat after it was confirmed that it was a missile test by Israel but it was a timely reminder of the fluidity and uncertainty of the situation in the region, and kept investors on the back foot somewhat throughout the remainder of the day, despite some positive US economic data."
Israel acknowledged the successful launch of a missile in a joint exercise with the United States.
Moscow's defence ministry earlier said it had detected the launch of two ballistic missiles from the central part of the Mediterranean fired towards the Sea's eastern coastline on Tuesday morning.
Syria jitters revived at the end of session on news US Republican House Speaker John Boehner would support President Barack Obama's call for military strikes against Syria, in a potentially significant political move.
Boehner emerged from talks with Obama at the White House saying he would "support the president's call for action."
On the foreign exchange markets, the euro fell to $1.3151 from $1.3192 late Monday. The US dollar firmed to 99.57 Japanese yen from 99.43 yen.
Early in the day, European equities had experienced flat trading as takeover activity in the telecoms sector was offset by investor caution before this week's interest rate calls.
Finnish telecommunications group Nokia announced the sale of its mobile phone division to Microsoft for 5.44 billion euros ($7.17 billion) on Tuesday.
The news came one day after US telecoms giant Verizon and Vodafone of Britain agreed that the British company would sell its 45-percent stake in their joint venture Verizon Wireless for $130 billion.
On Thursday, investors will digest the latest interest rate decisions from the Bank of England and the European Central Bank.
"Investor confidence has been given a further boost with a pick-up in merger and acquisitions (M&A) activity, but with rate calls this week investors will be nervous of a swift change in sentiment on the back of the strengthening global recovery," added McCudden.
Following the Microsoft announcement, Nokia's share price soared as much as 45 percent.
The stock closed at 4.19 euros, up 33.49 percent, sending the Helsinki stock exchange up by 3.7 percent overall.
The Microsoft deal will bring and end to Nokia's days as a phone maker. Nokia, once the darling of the mobile phone industry, has struggled to compete with smartphone market leaders Apple and Samsung.
Hargreaves Lansdown's Richard Hunter said that US groups were eager to snap up assets.
"It is often forgotten that, as a whole, the eurozone is the world's second-largest economy," he told AFP.
-- M&A activity --
"The M&A activity has already been positively received," he said adding that there was speculation about whether AT&T is also on the prowl.
"Potentially it is a sign that, at last, companies are preparing to spend some of their cash piles on acquisitions."
In London, Vodafone's share price fell 5.02 percent to 202.50 pence on profit-taking, as investors digested the Verizon Wireless buyout.
The vast $130-billion deal -- which would be one of the biggest transactions in corporate history -- would allow Vodafone to bounce back from hefty losses, pay down debt, make new acquisitions and return money to shareholders, analysts said.
On Wall Street, the Dow Jones Industrial Average was up just 0.05 percent in midday trade, but the tech-heavy Nasdaq stayed well into positive territory, up 0.66 percent.