Shares slip as European bond bashing rumbles on

Global shares experienced a decline on Thursday due to mounting concerns in sovereign bond markets, driven by a surge in oil and gas prices and rumors of major tech firms raising billions in debt for AI developments. France witnessed renewed selling of heavily indebted country bonds, while the region's shares hit near a three-month low early on.

European Central Bank policymakers issued fresh inflation warnings, adding to market jitters. Oil prices surged nearly 4%, reaching a three-month high due to increased ship attacks in the Gulf, further exacerbating bond market tensions. Despite a successful US 10-year debt auction, benchmark Treasury yields remained high, contributing to the euro's decline near a 17-month low.

Investors are closely monitoring potential contagion effects on Italy, Greece, and the banking sector. Some analysts suggest monetary intervention, such as the ECB's bond purchases, could provide relief. However, they argue that policymakers will first focus on fiscal measures to resolve the crisis. Debt issuance pressures equities, with European banks and tech firms like SpaceX, Broadcom, and Oracle seeking substantial financing.

While some sectors may benefit from the AI investment rush, the potential risks of unsustainable debt repayment loom over global investors.