Europe shares down as tech slips on downbeat Apple, Amazon results

[October 29, 2021]  By Anisha Sircar

(Reuters) -Technology stocks dragged European equities lower on Friday as Apple's suppliers fell after the iPhone maker's downbeat holiday-quarter forecast, while investors remained nervous about the monetary policy outlook.

Shares in semiconductor companies AMS, STMicronelectronics, Infineon Technologies and ASML lost between 1.1% and 2%, weighed down by supply chain woes that cost Apple Inc $6 billion in quarterly sales.

Europe's tech index fell 1.3%, while the pan-European STOXX 600 dropped 0.5%, as investors around the globe turned nervous following dour earnings updates from Wall Street's tech giants and persisting inflation fears. [.N]

"We're going to keep seeing this two-way price action in the markets, driven by a clash between strong earnings and optimism over the economic outlook, contrasting with risks of higher inflation, interest rates and energy prices," said OANDA analyst Craig Erlam.

Meanwhile, data showed French and Italian economies growing faster than expected in the third quarter, while supply shortages held back German output.

ECB president Christine Lagarde on Thursday disappointed market expectations that she would push back firmly against recent moves in markets which are pricing in two rate hikes by December 2022.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 23, 2020. REUTERS/Staff

Overall, earnings have kept the STOXX 600 on track for its fourth consecutive weekly gains after losses in September. The STOXX 600 is also set for its best month since March.

Among gainers, premium German carmaker Daimler added 0.9% after posting a higher quarterly profit despite a 30% drop in Mercedes-Benz sales due to the chip crisis.

Luxury eyewear brand EssilorLuxottica also advanced 1.4% after raising its 2021 guidance and saying sales continued to rise above pre-pandemic levels in the third quarter.

French aerospace group Safran rose 2.9% after it raised its full-year cashflow target, while re-insurer Swiss Re gained 2.6% after reporting strong net profit results as it recovers from the pandemic.

Britain's Natwest fell 4.3% despite posting a tripling of profit in the third quarter.

(Reporting by Anisha Sircar in Bengaluru; Editing by Subhranshu Sahu and Saumyadeb Chakrabarty)

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