Global stocks slumped Thursday as more weak data fuelled concern that the world was heading for another recession, and after the US Federal Reserve reportedly expressed concerns over European banks\' liquidity. Traders\' screens were awash with red, as Madrid, Milan and Paris equities plunged more than 6.0 percent, while London, Paris and Zurich shed more than 5.0 percent. The toxic cocktail of negative news sent gold flying to fresh records above $1,826 per ounce as investors sought the safe-haven precious metal, while oil prices slid even lower on worries about dwindling future demand for energy. The European single currency fell against the dollar as investors sought to lessen their risk exposure, dealers said. Banking stocks in Paris were particularly hard hit on Thursday, with BNP Paribas off 8.24 percent, Credit Agricole down 9.0 percent and Societe Generale lost more than 12 percent. \"Sentiment on financial markets has deteriorated noticeably over recent weeks,\" said economist Nick Kounis at ABN Amro. \"Equity prices have fallen sharply, reflecting heightened worries of a recession,\" he added. Traders were reacting to a report in the Wall Street Journal that the Fed is concerned European banks might be forced to repatriate funds from US subsidiaries in the event of a liquidity shortage. \"Federal and state regulators, signaling their growing worry that Europe\'s debt crisis could spill into the US banking system, are intensifying their scrutiny of the US arms of Europe\'s biggest banks,\" the business daily said. Analysts said the report had served as a wake up call for any traders who had forgotten previous warnings from the European Central Bank, which on August 6 said it was ready to provide extra liquidity. \"A brutal day so far for equity markets with financials under pressure, not helped by the Sarkozy-Merkel proposals for a financials transaction tax but also by worries that a key eurozone bank is in trouble,\" said VTB Capital economist Neil MacKinnon. Wall Street also plunged by about 4.0 percent in opening trade on Thursday after investment bank Morgan Stanley warned that the United States and Europe were teetering on the brink of a new recession. European Union president Herman Van Rompuy\'s assurances that there was \"no new recession\" in sight in Europe failed to calm nerves. Morgan Stanley also slashed its 2011 global growth estimate to 3.9 percent from 4.2 percent, and its 2012 forecast to 3.8 percent from 4.5 percent. Adding to the market fears, the US Federal Reserve Bank of Philadelphia said that manufacturing in the mid-Atlantic states took a sharp hit in August. The bank said manufacturing activity \"dipped significantly,\" lowering its index to negative 30.7 in August from positive 3.2 in July. Data showing that new claims for US unemployment insurance rose last week also spooked investors. The figures showed new claims rose to 408,000 -- a gain of 9,000 from the previous week. \"The concern is that the escalating European sovereign debt crisis -- which is now engulfing larger countries -- and the potential fall-out for the banking sector and financial markets, could provide a killer blow,\" Kounis said. New York\'s Dow Jones Industrial Average was down 3.9 percent to 10,967.31 in the first hour of trading on Thursday. At the same time, US Treasury bond yields plunged Thursday, with the 10-year yield -- the return earned by investors -- hitting a record low as recession worries battered sentiment. The 10-year Treasury yield fell to 1.974 percent, lower than the previous record during the US \"Great Recession,\" before recovering slightly to 2.007 percent, while the 30-year hit 3.337 percent before rebounding to 3.371 percent. Dealers said investors were looking to bonds to provide some safety in the storm, with lower yields seen in all of the stronger country markets. Meanwhile, fresh plans to tackle the eurozone debt crisis have clearly failed to win over investors, who brushed off Tuesday\'s summit meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. Traders also dismissed the pair\'s proposal for a Europe-wide tax on financial transactions as old hat, likely to be ineffective at best and at worst, to drive business out of Europe into other centres. Asian stock markets slid earlier on Thursday, with Tokyo down 1.25 percent to record its lowest finish since March 15 -- four days after Japan was hit by an earthquake and tsunami that spiralled into a nuclear disaster. Elsewhere across the region on Thursday, Sydney stocks shed 1.22 percent, Seoul dropped 1.70 percent and Hong Kong lost 1.34 percent.