European shares remained largely unchanged on Wednesday as a boost from mining company Antofagasta (LON:ANTO), following a rating upgrade, was countered by declines in real estate stocks, while pressure from elevated bond yields added to the dour mood.

The pan-European STOXX 600 index held steady at 557.44 points, after reaching a record high in the previous session.

The travel and leisure sector lost 1.1% with Jet2 dropping 9.8%, as the British travel company continued to grapple with inflationary input cost pressures.

Euro zone bond yields rose for the fourth consecutive day, constraining any potential gains in equities. Meanwhile, the UK’s benchmark 10-year gilt yield climbed to its highest level in three weeks, following Britain’s inflation rate unexpectedly accelerating to a 10-month high of 3% in January.

London’s FTSE fell by 0.3%.

The real estate stocks, which is sensitive to interest rates, saw a 0.4% decline, with London-listed housebuilders leading the losses in the sub-sector.

In political developments, European leaders have emphasized the need to increase defence spending in light of the U.S. adopting a more reserved role in Europe’s defence, a move likely to result in increased government borrowing.

The automobile sector remained largely unaffected by U.S. President Donald Trump’s proposed 25% auto tariffs, as investors increasingly view them as a negotiation tool.

The STOXX 600 is up nearly 10% so far this year as investors capitalize on the attractive valuations of European equities, allowing the index to outpace its Wall Street counterparts, with the S&P 500 up 4.2% and the Nasdaq gaining 3.8%.

“Better earnings outlook, positive earnings revision from analysts and improving economic data has contributed to investors turning more constructive on European stocks,” said Lilian Chovin, head of asset allocation at UK private bank Coutts.

However, “the rally is fragile to the details of the tariffs, therefore, we’re still a little bit cautious”.

The energy sector experienced a 0.5% rise during the session, tracking oil prices, while the utilities sector emerged as the top sectoral gainer, climbing 1.2%. [O/R]

Among stocks, BP (NYSE:BP) rose 1% after a report said the oil major is considering a potential sale of its lubricants business, Castrol, which could be worth about $10 billion in a deal.

BAE Systems (LON:BAES) lost 1.2% after the defence group reported its full-year results and announced its 2025 outlook.

Philips lost 7.4% after the Dutch healthcare technology company missed market expectations for the final quarter of last year.

Antofagasta gained 2.9% after J.P. Morgan upgraded the rating on the miner to “overweight” from “underweight”.

MTU Aero Engines (OTC:MTUAY) lost 5.8% following the engine manufacturer’s full-year results and 2025 outlook.