* German 10-year bond yields fresh record low
* Brexit-sensitive UK stocks sink on no-deal fears
* Royal Unibrew jumps on Q2 beat, revised guidance (Recasts throughout, changes comments, updates to close)
By Agamoni Ghosh
Aug 28 (Reuters) - European shares inched lower on Wednesday as worries of a looming global recession kept investors from making bold bets, while a dive in the pound over fears of a disorderly Brexit pushed British stocks higher.
The pan-European STOXX 600 index ended 0.2% lower paring deep losses from the morning, helped by London’s exporter-heavy FTSE 100 as sterling tumbled after Prime Minister Boris Johnson announced plans to suspend parliament.
Johnson’s move, approved by Queen Elizabeth, limits the British parliament’s ability to derail his Brexit plans, stoking fears of an economically disruptive no-deal departure from the European Union on Oct. 31.
“Although he is using normal parliamentary procedure, what’s different is the accusation that it is a device to limit the ability of those who oppose a no-deal Brexit to debate and plan,” said Ken Odeluga, market analyst at City Index in London.
UK house-builders were the hardest hit on worries that a hard Brexit would damage the British economy. Persimmon, Berkeley, Barratt Developments and Taylor Wimpey were the biggest decliners on the FTSE 100, down 3% to 5%.
Dublin stocks sensitive to Brexit news fell 1.3% with Irish low-cost carrier Ryanair falling nearly 2%.
The picture was more mixed for the rest of Europe, with Germany’s trade-sensitive DAX ending lower, but bank-heavy Madrid stocks finishing in the positive territory.
Milan stocks ended flat, reversing earlier losses as Italy appeared to be nearing the end of its latest political turmoil with the opposition Democratic Party (PD) saying it was ready to form a coalition with the 5-Star Movement.
A majority of European sub-sector indexes fell, with technology stocks down 1% after a forecast cut from U.S. software company Autodesk Inc.
Danish companies were at extreme ends of the STOXX 600 index. Brewer Royal Unibrew was up 10% on higher-than-expected second-quarter results and an upbeat outlook, but jeweller Pandora slumped 6% after Tiffany & Co warned of the potential impact from ongoing protests in Hong Kong.
A deep inversion in the U.S. Treasury yield curve rattled investors about a possible global recession in the face of a U.S.-China trade war. Bond prices in the United States later trimmed earlier gains after Wall Street’s major indexes turned positive.
“While the U.S. economy remains relatively strong, the yield curve may in fact be serving its traditional function of not reflecting just the U.S. economy but reflecting the prospects of the global economy as well,” said Odeluga.
Bond market gains were still intact across the euro zone, with Germany’s 10-year bond yields at a fresh record low.
A sharp escalation in the tariff war between the world’s two largest economies is putting an increasing strain on the global economy with the STOXX 600 on track to end August lower. (Reporting by Agamoni Ghosh, Medha Singh and Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur and Gareth Jones)