World stocks stumbled from the previous day's 1-1/2 month high Tuesday and government bonds rose as slower-than-expected Chinese growth data and a warning on France's triple-A sovereign credit rating prompted investors to cut risks.

The spread between French and German 10-year government bond yields rose to a 16-year high after rating agency Moody's said it may slap a negative outlook on France's credit rating in the next three months. Concerns have been rising over the costs to Europe's major economies if they have to bail out more banks or weaker euro zone members.

China's annual gross domestic product growth eased to 9.1 percent in July-September, slightly below forecasts of 9.2 percent, indicating the world's second-largest economy expanded at its slowest pace since the second quarter of 2009.

Investors' resolve is being tested quite considerably. The situation in Europe is still overhanging in a very large fashion and the Chinese data does add another tick in the box of worries for investors to digest, said Keith Bowman, equity analyst at Hargreaves Lansdown.

The kind of backdrop we have got at the moment is creating ideal conditions for people to take profits.

MSCI world equity index <.MIWD00000PUS> fell 1 percent. The benchmark index is still up more than 11 percent after hitting a 15-month low earlier this month.

European stocks <.FTEU3> fell 1.3 percent.

Optimism over a key European Union summit coming up Sunday waned after German Finance Minister Wolfgang Schaeuble said on Monday that even though European governments would adopt a five-point platform to address the crisis, a definitive solution would not be reached at the summit.

The nervousness is very high, and negative comments will have a larger impact than positive comments. The balance of risk is we're definitely going to see more positive performance in Bunds, Nordea analyst Niels From said.

Emerging stocks <.MSCIEF> lost more than 2 percent.

Investors are also eyeing corporate earnings. IBM reported third-quarter revenue that met forecasts, while lender Wells Fargo 's results fell short of expectations.

Of the 45 companies in the S&P 500 that have reported earnings, 62 percent have beaten analyst expectations, according to Thomson Reuters data.

VIX <.VIX>, Wall Street's so-called fear gauge, rose 18.2 percent to 33.39 on Monday, its highest one-day jump since August.

U.S. crude oil fell 0.4 percent to $86.03 a barrel.

Bund futures gained 86 ticks. The French/German 10-year government bond yield spread widened to a euro era record of 101 basis points. French debt also underperformed its triple-A rated peer the Netherlands.

The dollar <.DXY> gained 0.2 percent against a basket of major currencies.

The euro fell 0.15 percent to $1.3710.

(Additional reporting by Atul Prakash; Editing by Catherine Evans)