European and US markets extended losses Wednesday on worries central banks may soon begin winding down stimulus measures while aluminium prices hit a 13-year high after the coup in top global producer Guinea.
In Asia, hopes for more Japanese stimulus helped Tokyo extend a recent rally.
"It’s been a uniformly negative day for European stocks, as concerns over slowing economic activity weigh on sentiment against a backdrop of rising prices and chatter that central banks are looking at paring back the amount of stimulus in the weeks and months ahead," said Michael Hewson, chief market analyst at CMC Markets UK.
London shed 0.8 percent, Paris dropped 0.9 percent and Frankfurt fell 1.5 percent.
"Tomorrow’s European Central Bank rate meeting could well be an interesting affair given comments released earlier today from Austrian governing council member Robert Holzmann, who warned that the central bank might normalise policy sooner than markets expect," Hewson added.
Markets have been fixated for weeks on when central banks, in particular the US Federal Reserve, will begin to wind down or "taper" their stimulus support as economies recover and inflation accelerates.
"Losses prevail across global indices this afternoon, helped along the way by James Bullard’s comments about pushing ahead with a taper in Fed asset purchases despite the recent weaker NFP print," said analyst Chris Beauchamp at online trading platform IG, referring to the head of the St. Louis Federal Reserve Bank, who is influential if not a voting member of the committee that decides monetary policy.
The non-farm payroll data last week showed job creation slowed considerably last month, possibly due to a surge in the number of Covid-19 cases due to the Delta variant, and which many analysts took as a sign the Fed would not begin its tapering policy in the next month or two.
The Dow was down 0.2 percent in late morning trading. The Nasdaq Composite, which edged higher on Tuesday to set a new record, pulled back 0.7 percent.
In commodities trading, prices of aluminium hit $2,807.50 in Asian trade on the London metals market -- the highest since 2008 -- on supply concerns following the coup in Guinea, which has the world's largest reserves of bauxite from which the metal is made.
Bitcoin recovered, sitting at around $46,100 after seeing wild fluctuations on Tuesday as El Salvador became the first country to use it as legal tender.
The unit had plunged by almost a fifth to as low as $43,000 after a technical issue hit the official digital wallet on vast consumer demand, though that was later resolved.
Tokyo's Nikkei 225 ended above 30,000 points for the first time since April after Japan's Prime Minister Yoshihide Suga last week said he would stand down, raising hopes his successor will introduce fresh economic stimulus.
On Wednesday, one of the front-runners, Fumio Kishida, pledged to push for trillions of yen in investment if he takes the post.
Data showing growth in the second quarter was better than first thought added to the positive vibes in Japan.
The Nikkei has risen around five percent since the Suga news broke, putting the index on course for a three-decade high.
- Key figures around 1530 GMT -
New York - Dow: DOWN 0.2 percent at 35,023.71 (points)
EURO STOXX 50: DOWN 1.0 percent at 4,182.01
London - FTSE 100: DOWN 0.8 percent at 7,095.53 (close)
Frankfurt - DAX 30: DOWN 1.5 percent at 15,610.28 (close)
Paris - CAC 40: DOWN 0.9 percent at 6,668.89 (close)
Tokyo - Nikkei 225: UP 0.9 percent at 30,181.21 (close)
Hong Kong - Hang Seng Index: DOWN 0.1 percent at 26,320.93 (close)
Shanghai - Composite: FLAT at 3,675.19 (close)
Dollar/yen: UP at 110.36 yen from 110.30 yen at 2050 GMT
Pound/dollar: DOWN at $1.3746 from $1.3786
Euro/dollar: DOWN at $1.1815 from $1.1847
Euro/pound: UP at 85.97 pence from 85.90 pence
Brent North Sea crude: UP 1.2 percent at $72.55 per barrel
West Texas Intermediate: UP 1.4 percent at $69.32 per barrel