The pound is back under pressure after Brexit talks between Britain and European negotiators collapsed on the issue of Northern Ireland's border

New York (AFP) - Global stocks retreated Tuesday on anxiety over Brexit negotiations and debate between the US House and Senate over the massive tax overhaul as some investors took profits after big gains.

Most major bourses finished modestly lower, including those in Frankfurt, Paris, London, New York and Tokyo.

Talks between British and EU leaders remained in limbo after Arlene Foster, leader of the pro-British Democratic Unionist Party (DUP), objected to British Prime Minister Theresa May’s position on the future of Northern Ireland’s border with eurozone member Ireland.

“The text only came through to us late yesterday morning. Obviously once we saw the text, we knew that it was not going to be acceptable,” Foster told Irish public broadcaster RTE.

May is widely expected to return to Brussels on Wednesday or Thursday, with the EU warning that Sunday is the latest if she wants leaders to approve the opening of Brexit trade talks at a summit on December 14-15.

Doubts were also creeping onto Wall Streets in anticipation of haggling between Senate and House Republicans over the US tax cut proposal.

The House and Senate still must reconcile their different versions of the tax package, and Maris Ogg of Tower Bridge Advisors, said the current “wait-and-see mode” on Wall Street will shift only when there are clear signs of progress from Congress.

“Every time you get good news it reacts, and when there is no news or bad news, you just tread water,” she told AFP.

Meanwhile, the Treasury Department’s Office of Financial Research – an agency that monitors market and financial system stability – warned of mounting danger that stocks and bonds could see a “large correction.”

Market risks are “high and continue to rise,” the report said, noting that cyclically adjusted, the S&P’s price-earnings ratio is in the 97th percentile relative to the last 130 years.

In Asian trading, a tech selloff continued with shares in giants Samsung and Tencent sliding sharply, following the downturn on US markets Monday.

“The high-tech sell-off has worsened overall sentiment,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.

“Investors seem to be rebalancing (their portfolios) to take profits towards the end of the year, moving out of high-performing technology and health-care issues into financial stocks that are likely to fare well next year,” Matsuno told AFP.

- Key figures around 2215 GMT -

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

New York - S&P 500: DOWN 0.4 percent at 2,629.57 (close)

New York - Nasdaq: DOWN 0.2 percent at 6,762.21 (close)

London - FTSE 100: 0.2 percent at 7,327.50 points (close)

Frankfurt - DAX 30: DOWN 0.1 percent at 13,048.54 (close)

Paris - CAC 40: DOWN 0.3 percent at 5,375.97 (close)

EURO STOXX 50: DOWN less than 0.1 percent at 3,575.05

Tokyo - Nikkei 225: DOWN 0.4 percent at 22,622.38 (close)

Hong Kong - Hang Seng: DOWN 1.0 percent at 28,842.80 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,303.68 (close)

Euro/dollar: DOWN at $1.1826 from $1.1865 at 2200 GMT

Pound/dollar: DOWN at $1.3441 from $1.3470

Dollar/yen: UP at 112.57 yen from 112.41 yen

Oil - Brent North Sea: UP 41 cents at $62.86 per barrel

Oil - West Texas Intermediate: UP 15 cents at $57.62

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