European equities fell on Tuesday as concerns over European gas supplies and the Ukraine conflict again came to the fore, while the dollar weakened slightly against major rivals, helping the pound to rebound from a record low.

Paris, Frankfurt and London all closed in the red, failing to hang on to earlier gains. Wall Street followed suit in mid-morning trades after an early rally.

"There's little doubt instability is here to stay, and nerves are frayed as central bankers pull out all the stops to battle with inflation," Danni Hewson, analyst at AJ Bell said.

"And there's plenty of tension too over Russian moves to try to annex parts of Ukraine as well as worries about gas supplies after it emerged the pipeline that carries gas from Russia to Europe has suffered some kind of damage."

European natural gas prices surged nearly 10 percent at one point, to 190.50 euros, following news that the two Nord Stream gas pipelines linking Russia and Europe have been hit by unexplained leaks.

Explosions were recorded before the mysterious leaks, seismologists said on Tuesday, raising suspicions of sabotage amid tensions over Moscow's war in Ukraine.

The pipelines have been at the centre of geopolitical tensions in recent months as Russia cut gas supplies to Europe in suspected retaliation against Western sanctions following its assault on Ukraine.

"This damage is the clearest signal so far that Europe will have to survive the winter without significant Russian gas flows," analysts at Charles Schwab said in a note to clients.

In the latest warning of a looming economic downturn, World Trade Organisation chief Ngozi Okonjo-Iweala said on Tuesday that the world was heading towards a global recession as multiple crises collide.

Recession prospects have risen in recent weeks as central banks keep hiking interest rates to try and cool decades-high inflation, boosting in particular the dollar.

The Federal Reserve has carried out three successive bumper US hikes and is warning of more to come.

That has seen investors pile into the dollar, sending it to record or multi-decade peaks, in turn rattling governments from Tokyo to Beijing and London.

On Monday, the pound hit an all-time low at US$1.0350, with traders spooked by a UK tax giveaway they warned could further fuel inflation and significantly ramp up British state borrowing.

In late afternoon deals on Tuesday, the pound rose 0.6 percent to US$1.0755, having earlier rebounded by more than one percent.

The small recovery came after the Bank of England said it would "not hesitate to change interest rates by as much as needed".

With the pound showing record weakness against the dollar this week, analysts are forecasting a big rate increase when the BoE holds its next regular policy meeting on November 3.

Oil prices jumped more than two percent, helped by a weaker dollar.

"Oil remains a sellers' market with worries about a global recession and high interest rates intensifying," Fawad Razaqzada, analyst at City Index and FOREX.com said.

"In addition, with currencies of major oil importing nations tumbling, anything traded in US dollars will cost more... such as oil." (AFP)