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Chips are down as tech fears weigh on European shares

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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 fell 0.7 per cent, while Germany’s DAX declined 0.8 per cent, with industrials, consumer staples and financials the biggest weights.

Elsewhere, the FTSE100 was down 0.6 per cent at the open while the Iseq in Dublin was down 0.4 per cent.

The European tech sector dropped 1 per cent, weighed by chipmakers after an overnight report that Apple plans to replace Intel 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.

Reports of Apple increasingly going down the “insourcing” route have dented shares in Apple suppliers around the world, most notably Europe’s Dialog Semiconductor which has shed more than 60 per cent in the past year.

On Tuesday ams led the falls, down 2.8 per cent, while STMicro declined 2.3 per cent and Infineon fell 1.7 per cent.

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

Outside the tech sector, food services group Sodexo was the worst-performing on the STOXX, down 3.8 per cent after Goldman Sachs cut the stock to “neutral”, citing competition and cost inflation.

Acquisition news also continued to move the European market.

Eurofins Scientific shares fell 2.9 per cent, the worst performers on the STOXX, after the firm acquired Lab Frontier in South Korea.

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

– Reuters

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