Gold prices have hit a record high on growing expectations for US interest rate cuts. AFP
The increasing prospect of a US rate reduction also weighed on the dollar, helping push gold, a haven investment that is priced in the currency, to another record peak.
London and eurozone equities slid after official data showed that UK inflation held at 2.0 percent in June from May, stronger than forecast.
The British pound jumped close to a one-year high above $1.30 as investors also bet that the Federal Reserve was set to start reducing American borrowing costs soon.
Gold prices spiked to $2,482.42 per ounce, while the yen also rallied.
"European markets are continuing their downbeat tone," said Scope Markets analyst Joshua Mahony.
"Today's big-ticket news out of Europe came from the UK with inflation coming in higher than expected."
The 2.0 percent increase of Britain's Consumer Prices Index came in above market forecasts of 1.9 percent, which could cause the Bank of England to sit tight for a while longer before starting to cut rates.
In Asia, stock markets saw mixed fortunes as expectations for a US rate cut played out against the prospect of another Donald Trump presidency, which analysts warn could see inflation-fuelling tax cuts and import tariffs.
Adding to the upbeat tone was US retail sales data on Tuesday that smashed expectations, leading observers to lift their economic growth outlook.
While Wall Street saw another day of record highs owing to bets on lower borrowing costs and a more market-friendly White House, Asian dealers trod more cautiously as they also kept tabs on a key economic meeting of China's leaders in Beijing this week.
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