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Chipmakers drag European shares lower after Broadcom shock

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Technology shares led European shares lower on Friday after US chipmaker Broadcom warned of a broad slowdown in demand due to trade tensions and the US ban on Chinese tech and mobile phone company Huawei Technologies.

The forecast of a $2 billion hit to sales at one of the biggest US players in the sector came as Chinese industrial output growth slowed to a more than 17-year of 5 per cent in May and were among the clearest signs yet of the damage President Trump’s trade war may do to global growth.

European semiconductor companies Infineon, AMS and STMicroelectronics, Siltronic, Dialog Semiconductor all dropped between 2 per cent and 3 per cent after Broadcom Inc outlined the impact of a total halt in sales to Huawei.

The pan-European STOXX 600 index fell 0.38 per cent by 0707 GMT, with Germany’s trade-sensitive DAX falling 0.40 per cent.

Energy stocks were an outlier, up 0.2 per cent, with oil majors Total SA and Royal Dutch Shell providing the biggest boost.

Source: Economic Times