LONDON, Oct 23 — European shares dipped for the first time this week today, as warnings from Texas Instruments raised concerns about the global microchip industry, while UK lawmakers hit the pause button on Britain’s exit from the European Union.
European tech stocks were set for their worst day in two weeks, dragged down by chipmakers Infineon, Dialog and STMicroelectronics, as sector proxy Texas Instruments forecast a 10 per cent-17 per cent drop in current-quarter revenue.
The pan-European STOXX 600 index fell 0.1 per cent as the Brexit saga hit another snag after British lawmakers rejected Prime Minister Boris Johnson’s timetable.
“We don’t think the chances of a no-deal Brexit have increased, but the chance of a delay has definitely soured the mood,” said Hubert de Barochez, markets economist at Capital Economics.
European stock markets have been rattled in the past few months by geopolitical concerns, a prolonged US-China trade war and a manufacturing recession in the bloc’s biggest economy, Germany.
After solid gains in the first quarter, the benchmark index lost steam in the second and third. It kicked off October with its smallest quarterly increase this year.
With the focus now squarely on corporate earnings, analysts expect a drop of as much as 5.3 per cent in third-quarter profit, worse than the 3.7 per cent fall expected a week ago, according to IBES data from Refinitiv.
Heineken shares lost 2.3 per cent after the world’s second largest brewer said operating profit this year would be at the lower end of its previous forecast.
Mining stocks were the best performing European sector, lifted by a smaller-than-expected drop in quarterly profit at aluminum producer Norsk Hydro.
Auto stocks were up 0.3 per cent as PSA Group rose two per cent after sales of its SUVs boosted quarterly revenue.
Shares of Covestro AG rose two per cent, lifting the chemicals sub-sector 0.5 per cent, after the German company confirmed its full-year core profit outlook despite challenging global economic conditions.
Meanwhile, Brexit-sensitive FTSE midcap stocks slipped 0.2 per cent, underperforming their European peers, but losses were capped as the chances of a no-deal Brexit diminished. — Reuters
