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LONDON (The Deal) -- European and Asian stocks followed U.S. markets lower on Tuesday,  with Japanese and Hong Kong indices notching up losses that mean they are down well over  10% from previous highs, placing them firmly in "correction" territory.

The Nikkei 225 closed down 4.18% at 14,008.47, down more than 14% since its year-end high.

SoftBank was one of just two gainers, rising 2% after a report about  a meeting between the Japanese company's CEO and the Federal Communications Commission confirmed expectations the regulator probably won't permit its Sprint (S) - Get SentinelOne, Inc. Class A Report unit in the U.S. to buy T-Mobile USA (TMUS) - Get T-Mobile US, Inc. Report.

The Hang Seng closed down 2.89% at 21,397.77, down more than 11 since Dec. 30.  PC maker Lenovo sank more than 16% on analysts' downgrades in the wake of the two big-ticket deals it has announced over the past fortnight: the $2.3 billion purchase of the low-power server business of International Business Machines and the $2.91 billion purchase of the Motorola Mobility smartphone unit - minus the patents - of Google.

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In Europe the FTSE in London had edged down 0.09% to 6,459.83 by mid-morning. In Frankfurt the DAX was down 0.78% at 9,114.80 and in Paris the CAC 40  largely held up, at 4,1077.22, just 0.01% down on the day.  The European Union's statistics arm said euro-zone producer prices in December were down a less-than-expected 0.8% year-on-year and up 0.2% in the month, painting a picture of retreating deflationary pressures.

In the Netherlands, telecom Royal KPN was down 3.7% after missing fourth-quarter earnings forecasts. The company, a bid target last year of Carlos Slim's America Movil SAB de CV, said it will cut up to 2,000 jobs.

In the U.K. oil producer BP (BP) - Get BP Plc Report and gas producer BG Group both reported fourth-quarter earnings bulletins. BP's stock fell as the company reported that a closely watched measure of its earnings was down 28% year-on-year, partly because of its divestment program but also because of weaker refining margins. In BG's case, its shares rose as the company posted a fourth-quarter loss of $1.07 billion, mainly because of write-downs in Egypt, where political unrest disrupted exports, and said it would cut back on capital expenditure this year. BG had issued a profit warning last week.