The pan-European Stoxx 600 closed 1.37 percent lower provisionally, with all major bourses and every sector apart from oil in negative territory.

Among national indexes, Italy's FTSE MIB fell 2.65 percent, amid renewed political pain. The euro zone's third-largest economy has been without a government since an inconclusive vote in early March, with anti-establishment political groups abandoning their efforts to form a coalition over the weekend amid a dispute with the country's head of state.

Meanwhile, Spain's IBEX 35 was also off by almost 2.5 percent following news the country's Prime Minister, Mariano Rajoy, is due to face a confidence vote over his leadership on Friday. The announcement compounded political volatility in southern Europe.

Europe's banking index led the losses Tuesday, off almost 3.2 percent, on pace for its worst day since August 2, 2016. Spanish lenders Banco Santander and Caixabank and Italian lender Unicredit were among the worst performers in the sector.

Looking at individual stocks, Dixons Carphone tumbled to the bottom of the European benchmark after it issued a profit warning. The British retailer said profit would fall by 21 percent in the current year, with 92 standalone stores also set to close. Its shares were more than 20.7 percent lower on the news.