European Stocks Slide as Chip Sector Hurt by TMSC Outlook Cut
European stocks dropped on Wednesday as the chip sector was hit by a cut in the outlook of Taiwan Semiconductor Manufacturing Co. (TSMC). The benchmark Stoxx Europe 600 Index fell 0.7%, with the tech sector dropping 1.7%.
Chip Sector Hit by TMSC Outlook Cut
TSMC, the world’s largest contract chipmaker, cut its revenue outlook for the third quarter, citing a “weaker-than-expected demand” for some of its products. The company said it expects revenue to be between $10.4 billion and $10.5 billion, down from its previous forecast of $10.8 billion to $11 billion.
The news sent shares of chipmakers across Europe lower. STMicroelectronics NV, Europe’s largest chipmaker, dropped 4.3%, while Infineon Technologies AG fell 3.2%. Dialog Semiconductor Plc, which relies on TSMC for most of its production, dropped 4.7%.
Auto Sector Also Weighs on European Stocks
The auto sector also weighed on European stocks, with shares of Volkswagen AG, Daimler AG, and BMW AG all dropping more than 2%. The sector has been under pressure in recent weeks as the European Union considers a ban on the sale of new cars with internal combustion engines by 2030.
European Banks Lead Declines
European banks were among the biggest decliners, with shares of Deutsche Bank AG, UBS Group AG, and Credit Suisse Group AG all dropping more than 2%. The sector has been under pressure in recent weeks as the European Central Bank considers a new round of stimulus measures.
European Retailers Also Fall
European retailers also fell, with shares of Carrefour SA, Tesco Plc, and Marks & Spencer Group Plc all dropping more than 2%. The sector has been under pressure in recent weeks as the European Union considers a ban on single-use plastics.
UK Stocks Fall Despite Stronger Pound
The FTSE 100 Index dropped 0.7%, despite a stronger pound. The currency rose against the euro and the dollar after the Bank of England said it would keep interest rates on hold.
European Markets Summary
European stocks dropped on Wednesday as the chip sector was hit by a cut in the outlook of Taiwan Semiconductor Manufacturing Co. (TSMC). The benchmark Stoxx Europe 600 Index fell 0.7%, with the tech sector dropping 1.7%. The auto sector also weighed on European stocks, with shares of Volkswagen AG, Daimler AG, and BMW AG all dropping more than 2%. European banks were among the biggest decliners, with shares of Deutsche Bank AG, UBS Group AG, and Credit Suisse Group AG all dropping more than 2%. European retailers also fell, with shares of Carrefour SA, Tesco Plc, and Marks & Spencer Group Plc all dropping more than 2%. The FTSE 100 Index dropped 0.7%, despite a stronger pound.