Stock markets dive as investors bank profits

Asian and European stock markets sank Wednesday, deepening the week's losses as investors banked profits from recent gains, while wearily eyeing 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 Wednesday and was still languishing in the red around midday.

"It's profit taking until the end of the year," Will Hamlyn, senior equity investment analyst at Manulife Asset Management, told AFP when asked about the cause of this week's heady losses.

"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 also sows uncertainty.

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

Sentiment in London remains dented by the British government's ongoing struggle to reach a Brexit deal with the European Union.

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.

- Brexit casts shadow -

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.

Hamlyn said that Brexit "is casting a shadow (over stocks) to the extent that domestic UK company names geared to the UK economy have been shunned by investors".

"I do not think that the events of the last few days have really changed that."

He added: "Even if a deal does come in December, I do not think it would necessarily change that either because the hard work -- assuming there is a deal -- will come with the trade talks."

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 is released.

- Key figures around 1115 GMT -

London - FTSE 100: DOWN 0.1 percent at 7,317.68 points

Frankfurt - DAX 30: DOWN 1.0 percent at 12,917

Paris - CAC 40: DOWN 0.6 percent at 5,341.95

EURO STOXX 50: DOWN 0.8 percent at 3,541.90

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)

New York - DOW: DOWN 0.5 percent at 24,180.64 (close)

Euro/dollar: DOWN at $1.1825 from $1.1828 at 2200 GMT

Pound/dollar: DOWN at $1.3386 from $1.3442

Dollar/yen: DOWN at 112.14 yen from 112.58 yen

Oil - Brent North Sea: DOWN 40 cents at $62.46 per barrel

Oil - West Texas Intermediate: DOWN 43 cents at $57.19