European stocks inched lower on Wednesday as investors assessed a slew of earnings reports including chip equipment maker ASML's, while fears of more interest rate hikes kept investors on edge.

The pan-European STOXX 600 fell 0.2% by 0816 GMT, with technology and financials declining the most.

Shares of ASML Holding NV lost 2% and were among the top drags on the STOXX 600, despite forecasting sales growth of more than 25% for 2023.

Lonza Group AG fell 2.8%, even as the Swiss drug contract manufacturer reaffirmed its longer-term growth prospects.

The STOXX 600 had snapped two days of gains in the prior session, as an improvement in economic activity spurred speculation that the European Central Bank (ECB) might have more room to raise interest rates to tackle inflation.

Investors will monitor Germany's 2023 annual economic report in Berlin due at 1315 GMT amid easing fears of a recession in the euro zone's largest economy.

EasyJet PLC jumped 9.2% after projecting it would beat current market expectations for 2023 and deliver a full-year profit. (Reporting by Ankika Biswas in Bengaluru; Editing by Subhranshu Sahu)