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Chipmakers drag European shares lower after Broadcom shock

Chipmakers drag European shares lower after Broadcom shock
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June7, 2019. REUTERS/Staff -
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(Reuters) – Technology shares led European shares lower on Friday after U.S. chipmaker Broadcom warned of a broad slowdown in demand due to trade tensions and the U.S. ban on Chinese tech and mobile phone company Huawei Technologies.

The forecast of a $2 billion hit to sales at one of the biggest U.S. players in the sector came as Chinese industrial output growth slowed to a more than 17-year of 5% 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% and 3% after Broadcom Inc outlined the impact of a total halt in sales to Huawei.

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

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

(Reporting by Amy Caren Daniel and Medha Singh in Bengaluru; editing by Patrick Graham)

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