European Markets Follow Asia, U.S. Lower, Led by Falls in Chip Stocks

By Adam Whittaker

European stock markets followed the U.S. and Asia down in morning trade, as fears about the U.S. economy continue to unnerve investors, with shares in the semiconductor supply chain among the biggest losers.

The Euro Stoxx 50, which includes eurozone blue-chip stocks, was down 1.1% and the broader Stoxx Europe 600 down 1%. The Netherlands AEX fell 1.3% and Switzerland's SMI was down 1%. France's CAC 40, Germany's DAX, Italy's FTSE MIB and Spain's Ibex 35 were all down around 0.80%, while the FTSE 100 fell 0.64%.

Beyond stocks, oil prices extended the previous session's losses, reaching their weakest levels this year on fears of an oversupplied market. Brent crude was down 1.2% to $72.85 a barrel, while WTI fell 1.4% to $69.37 a barrel.

The biggest European fallers were those in the semiconductor supply chain, mirroring moves seen across Asian markets after U.S. chip giant Nvidia suffered steep losses Tuesday. The Stoxx Europe 600 Technology index was down 2.6%.

In the Netherlands, semiconductor-equipment maker ASML Holding was the largest faller, down nearly 5%, and smaller peers ASM International and BE Semiconductor Industries were down more than 3%. European chipmakers Infineon Technologies and STMicroelectronics fell more than 2%.

Other companies in the semiconductor supply chain such as Germany's Aixtron, France's Soitec and Switzerland's VAT Group all traded lower.

Technology stocks' tumble began with a 9.5% fall in Nvidia shares on Tuesday, a move that wiped $278.9 billion from the company's market value. This then spread to Asia, affecting companies involved in the tech giant's supply chain.

Nvidia's dramatic fall and the broader global selloff was triggered by data from the U.S on Tuesday that pointed to weak demand for U.S. factories, causing fears of a recession to resurface.

The CBOE Volatility Index--or VIX, widely seen as a measure of investors' expectations of market turbulence--surged in a move reminiscent of last month's stock-market rout, which seems to have begun with concerns about the U.S. economy triggered by weaker manufacturing data, analysts at trading platform IG said in a market comment.

Tuesday's ISM purchasing managers' index for August was lower than expected and remained in contraction. S&P Global's PMI also contracted and construction-spending data was also lower than expected.

--Giulia Petroni contributed to this article.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

September 04, 2024 04:38 ET (08:38 GMT)

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