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UPDATE 1-European stocks fall as recession fears ramp up

Amy Caren Daniel

* Treasury yield curve inversion gets steeper

* BP Plc gains on deal to exit Alaska

* Technology hardest hit among major sectors (Adds comment, updates prices)

Aug 28 (Reuters) - European stock markets slid on Wednesday, led by technology companies, as fears that major economies might be on the brink of a recession intensified.

A deep inversion in the U.S. Treasury yield curve once again rattled investors worried about economic growth in the face of a U.S.-China trade war that is now in its second year and is weighing on the global economy.

The euro zone's government bond yields edged towards record lows on Wednesday. The pan-European STOXX 600 index slipped 0.45% by 0800 GMT, with Germany's trade-sensitive DAX weighing with a 0.52% drop.

The technology sector fell 1.2%, hit by a forecast cut from U.S. software company Autodesk Inc. Software provider SAP SE, chipmaker Infineon Technologies AG and payments company Wirecard AG fell between 0.8% and 1.5%.

"The relative lull in the markets now belies investors' anxiousness who are fretting over global downside risks," Han Tan, Market Analyst at FXTM, wrote in a note.

"Investors cannot rule out another spike in U.S.-China trade tensions coming out of the blue in the near-term, which ensures that markets will remain trepidatious for the time being."

The trade dispute is putting an increasing strain on the global economy, forcing policy makers to respond with fiscal stimulus to bolster growth.

A sharp escalation in the tariff war between the world's two largest economies this month has put the benchmark index on track to end August about 3.5% lower.

Italian stocks posted the smallest losses among European bourses, down 0.20%, after posting two straight sessions of gains as the two parties trying to form a new government in Rome appeared close to a coalition deal on Tuesday.

British American Tobacco fell 1% and Imperial Brands 2%, weighing on the STOXX 600, after news on Tuesday that Philip Morris and Altria were in talks to reunite.

A bright spot was the 1.2% gain in British oil major BP Plc , which gave the biggest boost to the main index, after the company agreed to sell its Alaskan properties for $5.6 billion to privately held Hilcorp Energy Co. (Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur)