The risk of owning Europe's corporate bonds is the highest on record relative to US company debt as investors lose confidence that authorities can tame the fiscal crisis.

Yields on investment-grade bonds in euro rose to a 10-month high of 2.39 percentage points, more than government debt, according to Barclays Capital index data.

Yields suggest debt investors are concerned Europe's sovereign debt crisis will stifle growth and curb profits even after EU president Herman Van Rompuy said a €750bn rescue package will be increased if it fails to quell volatility.

"It's largely fear-driven," said John Milne, chief executive of JKMilne Asset Management. "People like ourselves are holding onto positions, watching the market like a hawk."

"Deficits in Europe remain massive and are going to weigh down the economic recovery," said Juan Esteban Valencia of Société Générale.

Europe's rescue fund for nations struggling with spiraling budget deficits, backed by €440bn of national guarantees, has had a "muted impact," said Jamie Stuttard, head of European and UK fixed income at Schroders.