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US tech shares sell off as bitcoin soars above $11 000

New York - A strong US economic growth report lifted the Dow to a fresh record close on Wednesday, even as the tech-rich Nasdaq plunged following a sell-off in high-flying technology shares.

Meanwhile, bitcoin hogged the headlines after the virtual currency, which is not traded on world markets, smashed its way to historic peaks, racing past $11 000 a day after breaking $10 000 on a wave of feverish speculation as institutional investors looked to join the party.

Equity markets in Europe were mixed, with Paris and Frankfurt edging higher, but the FTSE in London tumbling after news reports of an impending deal on Brexit with the European Union boosted the pound.

On Wall Street, the Dow Jones index ended up 0.4% at a second straight record high of 23 9 40.68. But the tech-rich Nasdaq dived 1.3%, with giants like Apple, Google-parent Alphabet and Facebook losing two percent or more in a move that analysts characterized as a rotation to other sectors.

"Wednesday's technology sell off wasn't fuelled by a particular catalyst, rather, it was the result of investors dialing back their technology holdings following an impressive year-to-date run," said Briefing.com.

"Even with today's decline of 2.6%, the S&P 500's technology sector remains comfortably atop the 2017 sector standings with a year-to-date gain of 35.7%."

The pound rallied on reports that Britain and the EU were close to an agreement on a breakup deal. But word that the divorce settlement could cost the country up to 55bn have angered both Brexiteers and europhiles in Britain.

Sterling jumped briefly to a two-month peak of $1.3431, but lost ground after the EU's chief Brexit negotiator Michel Barnier refused to confirm the reports which he called "rumours." He later said the negotiations were not over.

"If this is correct then this would be a major step towards moving negotiations on to transition deals and a future trade agreement," said Craig Erlam of forex company OANDA.

But the stronger pound, along with weakness in petroleum-linked shares ahead of Thursday's Opec meeting, pressured the FTSE in London, which lost 0.9%.

Bitcoin breaks $11 000 

Bitcoin meanwhile continued its record-breaking surge. The virtual currency, which has ploughed to continuous records in recent weeks, finally broke $10 000 on Tuesday on another volatile day.

Around 14:00 GMT it soared past $11 000, before pulling back. Near 2200, it traded at $9 981 according to Bloomberg data.

The cryptocurrency hit a high of $10 903 in Asia, with some commentators suggesting it is being bought as an alternative by investors who consider mainstream global markets are valued too high.

But there is a worry that the rise - a more than tenfold surge since its 2017 low in mid-January - could result in a huge correction, analysts said.

"Clearly widespread acceptance and even adoption has aided the rally but the moves we've seen in recent days suggest there's been a substantial speculative component," Erlam said.

"I fear a substantial correction is not far away and this could be the true test of the correct value of the cryptocurrency."

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