(Bloomberg) -- European equities fell to their lowest in seven months as rising Treasury yields put pressure on risk assets across the world, and earnings reports from some of the region’s biggest companies disappointed.

The Stoxx Europe 600 Index fell 1.2% to its lowest level since March 17. Real estate and health care declined the most, while tech outperformed, with chip equipment stocks gaining after TSMC said that the semiconductor market was close to reaching a bottom.

Among individual stocks, Roche Holding AG fell after its third-quarter sales dropped, while Renault SA slipped after reporting results that missed estimates. Nestle SA also fell as revenue growth decelerated to the weakest pace in almost three years. Among gainers, SAP SE rose after Europe’s biggest software company said the current backlog for its cloud services surged 19% and reaffirmed its annual forecast.

In afternoon trading, the London Stock Exchange Group Plc said it is investigating a system incident, according to a statement on the company’s website. Only stocks on the FTSE 100 Index, FTSE 250 and international orderbook were available for trading, the LSE said.

 

Shares in Europe have been under pressure this week, with investors rotating into defensive sectors and value stocks. Ten-year treasury yields approached the 5% mark earlier on Thursday, while fears over tensions in the Middle East and disappointing earnings from some large companies have damped sentiment toward equities.

“Last week the reaction to the conflict in Israel was slightly muted but now it’s getting center stage as the situation escalates and the fear of increasing inflation and central banks not ending their interest rates hikes as it was previously expected is becoming more real,” said Luis Garcia, equity portfolio manager at Mapfre AM.

London recaptured its crown as Europe’s largest stock market from Paris on Wednesday, but that’s provided little relief for UK small and mid cap stocks, which are seeing capitulation.

For more on equity markets:

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  • US Stock Futures Unchanged; Netflix, Las Vegas Sands Gain

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--With assistance from Allegra Catelli and Sagarika Jaisinghani.

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