Stock markets dive as investors bank profits

Stock markets across the world sank Wednesday, deepening the week's losses as investors banked profits from recent gains and Europe wearily eyed Brexit developments.

Hong Kong and Tokyo spearheaded an Asian market plunge, with technology and energy firms the biggest losers after Wall Street dropped on Tuesday.

Europe meanwhile tripped out of the gates and was still languishing in the red by mid-afternoon, with the exception of London, as Wall Street extended the previous day's losses at the opening bell.

"It's profit taking until the end of the year," Will Hamlyn, senior equity investment analyst at Manulife Asset Management, told AFP.

"And in particular, there's been a lot of weakness in Asia over the last few days," he added, highlighting investor nerves over high valuation levels in the region.

A global equity rally hit the buffers this week as the US probe into Russia's alleged election meddling sowed uncertainty.

- Taxing times -

Additionally, traders remain cautious about Washington's ability to push through tax cuts.

"US stocks are lower in early action after faltering the past two sessions as the global markets assess the year's strong rally and the prospects for tax reform that has hamstrung the technology sector, with the expected highly contentious reconciliation process set to begin," said analysts at the Charles Schwab brokerage.

The pound retreated with British-EU talks in limbo, one day after the government's coalition partner dismissed Prime Minister Theresa May's position on the future of Northern Ireland's border with eurozone member Ireland (Other OTC: IRLD - news) .

But the weaker currency helped lift the London stock market into slightly positive territory.

May on Wednesday told parliament that "we will ensure that there is no hard border between Northern Ireland and the Republic of Ireland".

May is expected in Brussels again this week to try to get an agreement that would let her move the talks on to trade at an EU summit in mid-December.

Another key drag was sliding copper prices, which hammered the mining sector, while there were worries about China's crackdown on borrowing-fuelled investments.

Oil prices were hit by data showing a big rise in US crude inventories, which tends to signal weaker demand.

Elsewhere, bitcoin hit another record high, breaching $12,500, as the cryptocurrency continues to attract speculative interest from investors, having risen 15-fold since mid-January.

Eyes are also on Washington, where lawmakers must agree a fresh budget by Friday to avoid a painful government shutdown, the same day that key US jobs data are released.

- Key figures around 1430 GMT -

London - FTSE 100: UP 0.2 percent at 7,343.82 points

Frankfurt - DAX 30: DOWN 0.9 percent at 12,926

Paris - CAC 40: DOWN 0.3 percent at 5,357.51

EURO STOXX 50: DOWN 0.6 percent at 3,547.57

New York - DOW: DOWN 0.1 percent at 24,161.19

Tokyo - Nikkei 225: DOWN 2.0 percent at 22,177.04 (close)

Hong Kong - Hang Seng: DOWN 2.1 percent at 28,224.80 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,293.96 (close)

Euro/dollar: DOWN at $1.1803 from $1.1828 at 2200 GMT

Pound/dollar: DOWN at $1.3389 from $1.3442

Dollar/yen: DOWN at 112.23 yen from 112.58 yen

Oil - Brent North Sea: DOWN 50 cents at $62.36 per barrel

Oil - West Texas Intermediate: DOWN 69 cents at $56.93

burs-jh/cw

Source: AFP