Portugal Colonial - Stocks slide as traders mull Fed outlook, gas price spike

Eurozone equities also tanked as spiking natural gas prices sparked fears that winter energy shortages could cause recession, which helped push the euro down to a 20-year low under parity against the greenback.

Oil slumped on speculation over an Iran nuclear deal that could ease a supply crunch caused by producer Russia's invasion of Ukraine, as well as recession fears.

All eyes are on this week's symposium in Jackson Hole, Wyoming, where Fed boss Jerome Powell will deliver a speech that traders will follow for an idea about the US central bank's next moves.

- 'Critical moment' -

Stocks "began Monday in downbeat mood ahead of what could prove to be a critical moment for markets at the end of this week", said AJ Bell investment director Russ Mould.

"The Jackson Hole summit of central bankers and finance ministers is widely expected to see Powell take to the floor -- and puncture optimism which has built up over hopes the Fed may be nearing the point at which it pivots away from rate hikes."

A dip in price rises and signs of economic slowdown had raised hopes policymakers would ease up -- and possibly cut rates next year -- after two successive, 75-basis-point hikes, helping equities rally globally.

But that optimism has slowly been eroded in recent weeks as Fed officials, including Powell, have warned that the battle against inflation was far from won, particularly as the jobs market remained resilient.

The euro is under additional pressure after Russia's Gazprom said late Friday that the Nord Stream pipeline would be closed for maintenance at the end of the month, cutting Europe's daily gas deliveries.

As a result, Europe's Dutch TTF Gas Futures contract soared on Monday close to 300 euros per megawatt hour, not far from record struck after Russia launched its assault on Ukraine, amid worries that Russia will not resume supplies afterwards.

"It matters little whether Russia will decide to cut off flows completely," said CMC Markets analyst Michael Hewson. "The market is behaving as if they will."

- 'Recessionary risk' -

Rabobank analyst Jane Foley told AFP the rise in gas prices "focussed attention on recessionary risk for the eurozone. A clear break of parity risks a moves towards $0.95," she added.

In early morning London deals, the euro dipped as low as $0.9990 before clawing its way back above the psychological barrier.

Surging energy prices have this year driven inflation to 40-year peaks in nations including Britain and the United States, in turn prompting tighter monetary policy.

US banking group Citi has forecast that UK inflation would peak at 18.6 percent next January on the back of rocketing domestic energy prices.

Asian equity markets mostly fell on Monday, although Shanghai stocks rose after China's central bank cut prime loan rates as it tries to bolster the world's second-biggest economy, which has been ravaged by lockdowns as part of a zero-Covid strategy.

In Europe, London shed 0.2 percent, but both Paris sank 1.8 percent and Frankfurt 2.3 percent on spiking as prices.

In late morning trading on Wall Street, both the Dow and S&P 500 were down more than one percent, while the tech-heavy Nasdaq fell more than two percent.

The prospect of more US hikes also sent the dollar rallying versus the yen, and it is nearing the 140 yen mark for the first time in 24 years.

- Key figures at around 1530 GMT -

New York - Dow: DOWN 1.4 percent at 33,236.26 points

EURO STOXX 50: DOWN 1.8 percent at 3,653.40

London - FTSE 100: DOWN 0.2 percent at 7,533.79

Frankfurt - DAX: DOWN 2.3 percent at 13,230.57

Paris - CAC 40: DOWN 1.8 percent at 6,378.74

Tokyo - Nikkei 225: DOWN 0.5 percent at 28,794.50 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 19,656.98 (close)

Shanghai - Composite: UP 0.6 percent at 3,277.79 (close)

Euro/dollar: DOWN at $0.9941 from $1.0037 Friday

Pound/dollar: DOWN at $1.1758 from $1.1829

Euro/pound: DOWN at 84.49 pence from 84.86 pence

Dollar/yen: UP at 137.63 yen from 136.97 yen

West Texas Intermediate: DOWN 2.3 percent at $88.70 per barrel

Brent North Sea crude: DOWN 2.0 percent at $94.80

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T.Vitorino--PC