European Equities Struggle to Recover from Sell-Off Amid Rising Bond Yields

European equities are struggling to recover from Tuesday's sharp sell-off, with the Stoxx Europe 600 remaining close to a two-week low.

The main issue for equities is the rise in bond yields, which raises the cost of capital and makes stocks less attractive relative to bonds.

Growth-sensitive sectors such as technology, software, and real estate are being hit hardest by higher discount rates.

ECB Chief Economist Philip Lane noted that Eurozone inflation remains around 3%, above the 2% target, while higher energy prices could reignite price pressures.