European stocks steady amid bond market jitters

European shares held steady on Thursday as investors remained cautious in the face of renewed volatility in government bonds, while a sharp profit warning from British airline Jet2 weighed on the travel and leisure sector.

The pan-European STOXX 600 was flat at 546.93 points by 07:22 GMT after a choppy start to trading.

Sector highlights:

• Travel & Leisure: Down 1.2%, pressured by a sharp selloff in airlines. Shares of Germany’s TUI and EasyJet fell more than 4% each. Jet2 plummeted nearly 25% after warning that full-year operating profit would likely land at the lower end of forecasts.
• Automakers: Porsche slipped nearly 1% after confirmation it will be relegated from Germany’s blue-chip DAX index to the mid-cap MDAX, following recent losses tied to U.S. tariffs and weaker Chinese demand.

Market sentiment:
Caution prevailed as investors assessed the risks of rising debt burdens in developed economies, which this week triggered renewed volatility in both equities and long-dated government bonds.

Looking ahead:
Focus later in the day will shift to sovereign debt auctions in France and the UK, which are seen as key tests for sentiment after Europe’s bond selloff intensified earlier this week.