Market sentiments are likely to be choppy ahead of July 6 – the date on which the United States is set to impose additional tariffs on Chinese goods worth $34 billion.
Following China banning the sale of Micron Technology’s chip in the country, sentiments towards semiconductor stocks have soured. European shares were also trading lower with persistent worries over global trade.
As of 0829 GMT (4.29 a.m. ET), the pan-European STOXX 600 index was down 0.2% while Germany’s DAX slipped by 0.3% and the FTSE 100 by 0.2%.
On July 6, the United States is set to impose tariffs on Chinese goods worth $34 billion. China has said it will respond to U.S. tariffs.
This tit-for-tat trade dispute has soured market sentiments in recent weeks. To make matters worse, news of a Chinese court temporarily banning the sale of chips by Micron Technology in China, the world’s biggest memory chip market, have rocked Asian and U.S. semiconductor stocks.
“The biggest risks to the technology sector are regulation and global semiconductor disruption from an escalating trade war,” said Peter Garnry, head of equity strategy at Saxo Bank. “At this point, the probabilities for both scenarios having major impacts on the technology sector in the short term are low”.
Further, recent revision in profit guidance from Osram Licht and BE Semiconductor have weighed down market sentiments.
Shares of Comet, a Swiss company whose business focuses on radio frequency technology and X-Ray, issued a sales and profit warning for 2018; following the news, its shares plunged by 18%.
Shares in Danske Bank were among the biggest STOXX losers. A report citing fresh data in the bank’s Estonian money-laundering case suggested its extent was greater than previously reported.
Despite these losses, gains from the Telecom sector, which rose by 1.2%, utilities and health care saw a modest bump of 0.2%, each.