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Tech, trade fears weigh on European shares

Published 04/03/2018, 03:38 AM
Updated 04/03/2018, 03:40 AM
© Reuters. The DAX (German stock index) logo is seen at the stock exchange in Frankfurt
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LONDON (Reuters) - European stocks tumbled on Tuesday as investors entered the second quarter in a febrile atmosphere of trade tensions and mounting pressure on big technology companies.

The pan-European STOXX 600 (STOXX) fell 0.7 percent, while Germany's DAX (GDAXI) declined 0.8 percent, with industrials, consumer staples and financials the biggest weights.

The tech sector (SX8P) dropped 1 percent, weighed by chipmakers after an overnight report that Apple (NASDAQ:AAPL) plans to replace Intel (NASDAQ:INTC) chips in Macs with its own.

The index has fallen 8 percent in the past three weeks as anxiety grew over big tech companies with the focus on Facebook's use of data, and regulation of Amazon (NASDAQ:AMZN).

Reports of Apple increasingly going down the "insourcing" route have dented shares in Apple suppliers around the world, most notably Europe's Dialog Semiconductor (DE:DLGS) which has shed more than 60 percent in the past year.

On Tuesday ams led the falls, down 2.8 percent, while STMicro (MI:STM) declined 2.3 percent and Infineon (DE:IFXGn) fell 1.7 percent.

Risk appetite was poor across the board, as European investors followed U.S. and Asian investors to the exit after China retaliated against U.S. tariffs.

Outside the tech sector, food services group Sodexo (PA:EXHO) was the worst-performing on the STOXX, down 3.8 percent after Goldman Sachs (NYSE:GS) cut the stock to "neutral", citing competition and cost inflation.

Acquisition news also continued to move the European market.

Eurofins Scientific (PA:EUFI) shares fell 2.9 percent, the worst performers on the STOXX, after the firm acquired Lab Frontier in South Korea.

© Reuters. The DAX (German stock index) logo is seen at the stock exchange in Frankfurt

Basic resources and oil & gas stocks were a rare bright spot, making gains as metals prices rose.

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