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European shares retreat as trade worries weigh on tech

Published 04/07/2018, 08:42
Updated 04/07/2018, 08:51
© Reuters. A trader reacts at Frankfurt's stock exchange in Frankfurt

LONDON (Reuters) - European shares slipped on Wednesday as worries over global trade persisted, with sentiment souring around semiconductor stocks in particular after U.S. peer Micron was banned from selling chips in China.

The pan-European STOXX 600 (STOXX) index was down 0.2 percent by 0723 GMT, while Germany's exporter-heavy DAX (GDAXI) also declined 0.2 percent and the FTSE 100 (FTSE) fell 0.3 percent.

Trading has been choppy ahead of a July 6 deadline when the United States is set to impose tariffs on $34 billion worth of goods from China.

Twists and turns in the tit-for-tat saga have hit market sentiment in recent weeks, with news a Chinese court temporarily banned Micron Technology (O:MU) from selling chips in China, the world's biggest memory chip market, hitting shares in U.S. and Asian semiconductor stocks.

Europe's tech sector (SX8P) was led 0.5 percent lower by falls in chipmakers STMicro (MI:STM) and Infineon (DE:IFXGn), which were both down around 2 percent.

Recent guidance cuts from BE Semiconductor (AS:BESI) and Osram Licht (DE:OSRn) have also weighed on sentiment around the sector, which has fallen more than 8 percent since June's 17-year high.

Smaller Swiss stock Comet (S:COTNE), whose business focuses on x-ray and radio frequency technology, issued a sales and profit warning for 2018 and saw its shares plunge 9.5 percent.

Elsewhere a 1.9 percent fall in Compass Group's (L:CPG) shares weighed on European travel and leisure stocks (SXTP), after the catering firm said its finance chief was to leave the company by the end of the year, the second key executive change at Compass this year.

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