European shares lost steam on Wednesday after kicking off the new year with record highs, as rising US Treasury yields and regulatory worries in China kept global investors on edge.

The continent-wide STOXX 600 index rose 0.03% by 0816 GMT, with auto, chemical and oil & gas stocks rising the most in early deals.

Anticipation of early US interest rate hikes sent Treasury yields surging on Tuesday, spurring a rotation out of high-growth technology names into banks and other economically sensitive sectors.

European tech shares edged up 0.1% after getting slammed on Tuesday.

Dutch tech investor Prosus, which has a stake in China's Tencent, slid 3.2% after a top market regulator fined units of several Chinese tech firms for failing to properly report about a dozen deals.

Automaker Stellantis inched up 0.4% on news that its Chrysler brand was planning to shift to an all-electric lineup by 2028 and introduce new products.

German carmaker BMW gained 0.3% as it achieved record sales of over 2.2 million vehicles from its BMW brand in 2021.