BRUSSELS, Sept 28 — European shares slid 1 per cent today, in line with a sell-off in Asian markets, as an intensifying energy crisis in the region and the relentless surge in global bond yields fuelled worries about a recession.

The continent-wide STOXX 600 index was down 1 per cent, hitting its lowest since late-December 2020, and extending declines to a fifth session.

Germany’s DAX index lost 1.2 per cent, taking cues from Wall Street, which sank deeper into a bear market overnight.

Geopolitical tensions intensified as Europe investigated what Germany, Denmark and Sweden said were attacks on two Nord Stream pipelines at the centre of an energy standoff.

A media report said the European Union had threatened a "robust and united response” to probable pipeline attacks.

"Damaging the infrastructures clearly pushes the tensions between the West and Russia to a no-turning point, and dashes hopes of seeing an improvement anytime soon — both on the geopolitical and energy fronts,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

Reflecting the grim economic outlook, a survey projected German consumer morale would hit a record low in October as high inflation rates and rocketing energy bills show no signs of relenting.

Meanwhile, tech stocks came under pressure as the benchmark 10-year US Treasury yields topped 4 per cent, their highest in 12 years, amid fears the Federal Reserve might have to take rates past 4.5 per cent in its fight against inflation.

"That fear has now gripped the markets and we may see a little more caution going forward as the Fed has made it clear that one inflation reading doesn’t make a trend and it will take a lot more than that to convince it that it can afford to ease off the brake,” said Craig Erlam, senior market analyst, UK & EMEA, OANDA.

"Other central banks may have a lot more work to do; one in particular springs to mind, thanks to the misguided direction the government is taking the country in,” Erlam said, referring to the Bank of England.

London’s blue-chip FTSE 100 index dropped 1.4 per cent after the International Monetary Fund and ratings agency Moody’s criticised Britain’s new economic strategy.

All sectoral indexes on STOXX 600 fell, with the economy-sensitive oil and gas, basic resources, retailers and banks sectors down between 1 per cent and 1.8 per cent.

Shares of fish farmers such as Mowi, Leroy Seafood and SalMar dropped between 15 per cent and 20.2 per cent after the Norwegian government proposed a resource tax on salmon and trout farming of 40 per cent from the tax year 2023. — Reuters