European shares dropped on Wednesday, dragged down by tech stocks after Apple Inc's revenue forecast fell short of estimates, as the quarterly earnings season gathered pace in Europe and on Wall Street.
European shares dropped on Wednesday, dragged down by tech stocks after Apple Inc’s revenue forecast fell short of estimates, as the quarterly earnings season gathered pace in Europe and on Wall Street.
The FTSEurofirst 300 index of top pan-European shares was down 0.5 percent at 1,587.77 points by 1434 GMT. It fell 1.1 percent in the previous session.
The STOXX Europe 600 Technology index shed 1.5 percent, with chip designer Arm Holdings among those falling the most. It fell 5.9 percent after the results from Apple, a major customer, despite posting a 32 percent rise in second-quarter profit.
German chipmaker Dialog Semiconductor, another company with ties to Apple, tumbled 6.6 percent.
Apple said on Tuesday it sold 47.5 million iPhones in the third quarter, up 35 percent from a year ago. But some analysts had expected around 49 million. It also forecast fourth-quarter revenue of $49 billion to $51 billion, missing analysts’ average estimate of $51.13 billion according to Thomson Reuters I/B/E/S.
“Apple is a really big company, and having disappointed a little bit on the sales side of things, does tend to reverberate around the world in technology stocks,” said Wouter Sturkenboom, a senior investment strategist at Russell Investments.
However, he said that in the broader context of receding Greek fears, stock moves remained within the bounds of expected volatility.
Another badly hit sector was mining and natural resources, with the sector down almost 3 percent and Anglo American hitting its lowest level since 2002, as weak metals prices, worries over China demand and discouraging company updates soured sentiment.
Credit Suisse shares were among the worst performers on the Swiss stock market after the Financial Times reported the bank’s new chief was sounding out investors for support on a potential deal to bolster asset management.
French utility EDF fell 1.6 percent after the European Commission ordered France to recover 1.37 billion euros ($1.50 billion) from the company because of a tax exemption granted in 1997. The company said it would proceed with the repayment but may appeal the decision.
UK network operator TalkTalk slumped 8 percent after warning that competition was ramping up in the broadband market.
Danish lender Danske Bank rose 3.3 percent after a significant earnings beat.
Europe’s second-biggest budget carrier, easyJet, also gained, jumping 4.3 percent on guidance for annual profit growth of up to 14 percent.
“With all the concerns that the market has had about excess capacity in the market and the likely impact on yields, we believe that these results will be well received,” Numis analysts wrote in a note.