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European stocks began the final quarter of the year on a downward trend on Thursday, as investors shifted to less risky assets amid global bond yields remaining near multi-year highs.
The pan-European STOXX 600 index fell 1.2% to 626.99 points, its lowest level since mid-September.
Most European sectors declined, with bank stocks topping the list of losers.
Global bond yields rose sharply in September as investors sold off government bonds, while rising energy costs boosted inflation concerns and the AI boom supported growth expectations, reinforcing bets that interest rates will remain high for longer.
The yield on the 10-year US Treasury note jumped to its highest level in several decades at 5.3168%.
But oil prices fell below $100 a barrel, as concerns about crude supplies eased thanks to a recovery in oil exports from the Gulf region, along with a surprise rise in US crude inventories.
Attention will turn later today to the Eurozone unemployment data, which may provide further indications of the strength of the region's economy.
On the stock market, shares of British company Gamma fell by about 3% after Dutch private equity firm Waterland withdrew its bid to acquire it.
