European stocks closed deeper in the red Thursday amid a global bond market selloff in the wake of record-setting oil price inceases.
Britain's FTSE 100 index fell 0.5% by the session's close to 6,752 points, as solid advances for oil companies like BP and Shell were offset by sharp declines for globally-focused companies amid the recent surge in the pound.
The pound traded at its highest level against the dollar since the so-called 'Flash Crash' in early October as investors extend bets of a possible compromise in the country's Brexit negotiations with the European Union.
Sterling spiked around 1.5% in the afternoon session, taking the currency to 1.2691 against the greenback, its highest level since October 6, when sterling plunged more 6% in the space of two minutes during trading in Asia. The move also follows the currency's best month against the euro since the global financial crisis.
Equity benchmarks in Germany and France were also lower as sovereign bond yields rose in anticipation of sharper inflation with the DAX down 1% and the CAC-40 down 0.39%.
European bond markets sold off heavily in the wake of record-setting oil price rises as investors count the cost of faster inflation and higher interest rates.
Benchmark 10-year German bunds rose 9 basis points in European trading to change hands at 0.33%, the highest since February, leading yield rises around the region and mirroring the sell-off seen in U.S. Treasury markets.
U.S. 10-year Treasury yields, which move in the opposite direction of prices, rose 8 basis points to 2.46%, adding to the 60 basis point increase seen since the November 8 election - the biggest move in seven years - and taking the benchmark borrowing cost to the highest level since July 2015.