European stocks slide at open on mounting recession worries

Sept 28 (Reuters) – European shares opened lower on Wednesday, 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 0.8% by 0707 GMT, extending declines for a fifth-straight session, while Germany’s DAX index  lost 0.9%, taking cues from Wall Street, which sank deeper into a bear market overnight.

All the sectoral indexes fell, with the economy-sensitive oil and gas, banks and basic resources sectors down between 1% and 1.5%.

Tech stocks came under pressure as the benchmark 10-year US Treasury yields topped 4%, their highest in 12 years, with markets fearing the Federal Reserve might have to take rates past 4.5% in its crusade against inflation.

London’s blue-chip FTSE 100 index dipped 0.9% after Moody’s warned that unfunded UK tax cuts would be “negative” for the country’s credit standing, deepening a sell-off in gilts.

Meanwhile, 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.

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

Among stocks, Commerzbank slipped 2.1% as the German lender said it would take a 490 million euro (USD 469 million) hit to its third-quarter operating profit after its Polish mBank  unit booked additional provisions for its Swiss franc loans.

MediaForEurope (MFE) slid 2.2% after Italy’s top commercial broadcaster reported a 44% fall in first-half operating profit on the back of flat advertising sales and rising energy costs.

(Reporting by Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Savio D’Souza)