LONDON — European markets sank Tuesday morning as traders monitored heaving selling in the banking sector, and looked ahead to key central bank meetings and U.S. inflation prints.

The pan-European Euro Stoxx 600 indexThe German DAX dropped 1.8%, and the banking sector fell 2.3% in the early deals. This led to a drop of 1.2% in the initial transactions. Reports on Monday indicatedUnidentified investor sold large shares in Germany’s largest lenders to sell off. Deutsche Bank Commerzbank.

Deutsche Bank shares were down 9.5%, while Commerzbank shares fell 8.6%. In a statement, the former stated that they were “confident in their strategy”. The reports said the sale amounts to 116 million shares of Deutsche Bank and 72.5 million shares of Commerzbank — more than 5% of the two German banks.

BlackRock Fundamental Equities co-chief investor officer Nigel Bolton would not comment on stock news. However, he said traders must be attentive to large investor flows.

According to CNBC’s Squawkbox Europe, “When I look at the equity market at the moment, I do believe there are some attractive regions. Actually European banks are looking extremely cheap now.”

He said, “And in an atmosphere where you’re starting to notice rising rates, so long as you don’t think that we’re going into a kind of recessionary environment within a year or two, then they can actually look fairly attractive.”

The event will be watched by global investors. U.S. consumer price index reading for MarchThe Federal Reserve will be releasing an indication of how aggressively it plans to control inflation on Tuesday, and Wednesday with the Producer Price Index.

This week also marks the start of earnings season in America, where JPMorgan and Goldman Sachs are due to report.

Europe is a place where investors should also be aware developments in Ukraine. Russia’s invasion of the country caused volatility on oil and commodities markets which, in turn has disturbed stocks. U.K. Foreign secretary Liz Truss announced that the government of her country is working urgently to investigate details of an alleged chemical weapon attack on Mariupol in Ukraine.

On Thursday, European Central Bank policymakers meet in Frankfurt to discuss the next move in monetary policy. The tough task is to weigh surging consumer prices with downward pressure on economic growth resulting from the war in Ukraine.

The U.K.’s employment statistics showed that its jobless rate was at its lowest since 2019 – the first time it has been this low since 2018. The German ZEW Economic Sentiment indicator is expected to be released at 10.30 a.m. London.

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— CNBC’s Elliot Smith contributed to this article.