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June 13 Reuters European equities lost ground on Thursday, weighed down by elevated government bond yields after the U.S. Federal Reserve cut its interest rate cut projections to just one this year.

The continentwide STOXX 600 was down 0.5 as of 0828 GMT, after closing around 1 higher in the previous session.

The Fed held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December, with the central bankers projecting only one quarterpoint rate cut this year from three projected in March.

Bond yields across the euro zone rose, with the benchmark German 10year bund yield last seen at 2.556.

European equities have pulled back from last week39;s record highs hit on the back of the European Central Bank39;s rate cut, as investors assessed France39;s political uncertainty.

The political situation is not supportive of appetite in the European stocks, and the uncertainty is pushing the European yields higher and they are growing wider from each other, said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.

Separately, global index compiler MSCI decided on Wednesday not to include the European Union39;s debt in its government bond indexes.

Most sectors traded lower, with ratesensitive real estate down 0.6.

Auto stocks lost 2 and led sectoral…