BERLIN, May 20 — European stock markets struggled in the face of a US crackdown on China’s Huawei Technologies today after a report that German-based chipmaker Infineon had halted shipments to Huawei.
A profit warning from Ryanair also pressured airline stocks, overpowering the impact of a surge in oil producers due to rising crude prices and pushing the pan-European index STOXX 600 down 0.5 per cent by 0930 GMT.
Tech stocks fell the most across all European sectors as the report on Infineon followed news on Sunday that Google was suspending some business with Huawei.
“Chipmakers in Europe, and United states have been hit by trade tensions, especially today because Huawei has been banned from Google’s Playstore,” said Vlad Totia, research analyst at Accendo Markets.
A source told Reuters that Google had suspended business with Huawei that required the transfer of hardware, software and technical services except those publicly available via open source licensing.
AMS, STMicroelectronics, and ASML were down between 3 per cent and 7 per cent as fears of a disruption to the industry’s global supply chain grew.
Nokia and Ericsson however, gained from the news as investors judged damage to Huawei could benefit the European telecom equipment makers.
Europe’s largest low-cost carrier Ryanair fell more than 3 per cent after it was the latest major player to provide signs of pain in a sector struggling with overcapacity, Brexit and delays in delivery of the Boeing 737 Max.
EasyJet Plc, Lufthansa AG and Air France, all slid in response, pushing the travel and leisure sector down almost 1 per cent.
Deutsche Bank shares also came under pressure after the New York Times reported that anti-money laundering specialists at the bank recommended in 2016 and 2017 that multiple transactions involving entities controlled by US President Donald Trump and his son-in-law Jared Kushner be reported to a federal financial-crimes watchdog.
The newspaper, citing five current and former Deutsche Bank employees, said executives at the German-based bank, which has lent billions of dollars to the Trump and Kushner companies, rejected their employees’ advice and the reports were never filed with the government. Deutsche Bank denied the report.
Viennese stocks fell about 1 per cent in early trading after Austria’s president called for a snap election in September following the resignation of the country’s far-right vice chancellor over a video sting.
The oil and gas sector provided the major boost, up around 1 per cent as signs that OPEC was sticking to its production limits and the tension between Iran and Saudi Arabia in the Middle East pushed global crude prices around 90 cents higher. — Reuters