Last Updated: Jan. 3, 2024 at 8:22 a.m. ET
First Published: Jan. 3, 2024 at 7:45 a.m. ET
European bourses faltered Wednesday in the wake of Wall Street’s new-year sell-off with the region’s technology plays under notable pressure after a downgrade for Apple led the sector lower.
The DAX index DX:DAX in Frankfurt fell 1% and the FTSE 100 UK:UKX in London celebrated its 40th birthday with a 0.8% drop as miners struggled on concerns about waning economic growth.
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European bourses faltered Wednesday in the wake of Wall Street’s new-year sell-off with the region’s technology plays under notable pressure after a downgrade for Apple led the sector lower.
The DAX index
DX:DAX
in Frankfurt fell 1% and the FTSE 100
UK:UKX
in London celebrated its 40th birthday with a 0.8% drop as miners struggled on concerns about waning economic growth.
The CAC 40
FR:PX1
in Paris lost 1.4% as train-maker Alstom
ALO
fell 7% in response to Barclays cutting its price target for the train-maker from €8.5 to €8. Luxury-goods groups were also under pressure, with LVMH
MC
and Kering
KER
off about 3% after UBS analysts warned of a “weak earnings season” for the sector.
Amsterdam’s AEX index
NL:AEX
retreated 0.6% as chip-equipment makers ASML
ASML
and ASM International
ASM
fell 2% and nearly 3% respectively in sympathy with a pullback for the sector in Asia, and previously in the U.S.
In addition, Franco-Italian chipmaker STMicroelectronics
STMPA
was down 2.4% and its German peer Infineon Technologies
IFX
lost nearly 3%.
The sector, which has had a good run of late — with ASML up 16.5% over the last three months and ASM International up 82% over the last 12 months — was deemed ripe for some profit taking. And this was sparked by a downgrade of Apple
AAPL
by Barclays on Tuesday from neutral to underweight, in a note which triggered a broad tech sell-off.
ASML had already found its shares under the cosh on Tuesday following a report from Bloomberg that the U.S. had pressured the company to cancel the shipment of some of its machines to China.
“Tech stocks, with their rich valuations, are susceptible to the slightest economic wobble or shift higher in yields, and it’s not like everyone was participating in this narrow market high driven by A.I. hype,” said Stephen Innes, managing partner at SPI asset Management.
Elsewhere, shares in Airbus
AIR
fell 2% after the airplane manufacturer said it was in talks to buy Atos’s
ATO
cybersecurity unit that values the business at up to €1.8 billion ($1.97 billion) including debt.
A notable top performer was U.K. minnow C4X Discovery
C4XD
,
whose shares soared nearly 50% after the biotech group received an $11 million milestone payment from AstraZeneca
AZN
.
