European stocks start quarter lower as global yields hit multi-year highs

Oct 1 (Reuters) - European shares started the final quarter of the year on a downbeat note on Thursday as investors turned risk-averse with global bond yields hovering at multi-year highs.

The pan-European STOXX 600 .STOXX was down 1% at 628.1 points by 0720 GMT, falling to its lowest level since mid-September.

Most European sub-sectors declined, with banks .SXEP leading the losses.

Global yields surged in September as investors sold government debt, while soaring energy costs fuelled inflation concerns and the AI boom strengthened growth expectations, reinforcing expectations that interest rates could remain higher for longer.

The U.S. 10-Treasury yield jumped to a multi-decade peak of 5.3168%. US/

Oil prices, however, fell below the key $100-per-barrel level as recovering crude exports from the Gulf and a surprise rise in US inventories eased crude supply concerns. O/R

Focus later in the day will be on euro zone unemployment data, which could provide further insight into the strength of the economy.

Among individual stocks, UK's Gamma GAMA.L fell roughly 3% after Dutch private equity firm Waterland dropped its takeover offer.