FXStreet (Mumbai) - The European stocks reversed the initial corrective rally and fell back in the red zone as the extension of the Chinese equities rout and the region’s corporate news dampened investors’ sentiment. DAX drags Europe lower The German stocks extended losses and drops -0.95% to 10,186 points mainly dragged by German carmaker Volkswagen shares. The automaker’s shares fell over 4% after the US authorities filed a civil suit against the company for installing illegal devices in its vehicles that cheated emission tests. While stagnating Euro zone price pressures last month also added to the weakness in the DAX. While from the UK, shares of retailer Next plunged almost 5% after reporting disappointing sales figures for the Christmas period, driving the FTSE 100 -0.17% lower to 6,083. The sentiment, however, remained buoyed following the release of better than expected UK’s construction PMI data, which came in at 57.8 in Dec against 55.3 seen in Nov. Among other European indices, the French CAC 40 index slips -0.70% to 4,490, while the pan-European Euro Stoxx 50 index drops -0.55% to 3,144. For more information, read our latest forex news.