European stocks lost 0.8 percent in early trade as investors continue to shun risk, rattled by doubts over the pace of the global economic recovery.
Shares in global oil major BP lost 3 percent, extending their six-week slump, after the U.S. government announced a criminal probe into the oil spill in the Gulf of Mexico.
Oil fell below $72 on Wednesday in its third straight session of losses, as negative sentiment pervaded financial markets and investors favored the safety of the dollar over riskier commodities.
Japan's Nikkei average <.N225> fell 1.1 percent, with Japanese financial markets unsettled by the resignation of Japanese Prime Minister Yukio Hatoyama and his powerful No.2 on Wednesday to try to boost the ruling party's faltering fortunes in an election next month, less than a year after sweeping to power with promises of change.
On the macro front, investors awaited the U.S. Challenger jobs data for May, as well as U.S. pending home sales for April and U.S. auto sales.
Google expects to release its Chrome computer operating system in the late fall, a top executive said on Wednesday, as it aims a competitive strike at rival Microsoft's Windows.
The U.S. Food and Drug Administration approved on Tuesday the sale of Amgen Inc's osteoporosis drug Prolia to help prevent fractures in post-menopausal women just days after the medicine received European approval.
Altria Group Inc said it will pay $971 million in taxes and interests to the Internal Revenue Service (IRS) related to a dispute over the company's tax returns for the years 2000 through 2003.
After the bell on Tuesday, shares of Collective Brands Inc tumbled 8.2 percent to $19.78 in extended trade on Tuesday after the company reported its first-quarter results.
U.S. stocks fell on Tuesday as energy shares slid after the latest failed attempt to halt the oil spill in the Gulf of Mexico and the U.S. government announced a criminal probe into the disaster.
The Dow Jones industrial average <.DJI> dropped 112.61 points, or 1.11 percent, to 10,024.02. The Standard & Poor's 500 Index <.SPX> fell 18.70 points, or 1.72 percent, to 1,070.71. The Nasdaq Composite Index <.IXIC> gave up 34.71 points, or 1.54 percent, at 2,222.33.
(Reporting by Blaise Robinson; Editing by Hans Peters)