Europe Markets

Jan. 3, 2019, 5:04 a.m. EST

European markets shocked by Apple downgrade

By Emily Horton


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European stocks opened lower on Thursday as a surprise sales downgrade from Apple jolted markets.

As a result, the technology sector led the decline, with Switzerland’s Ams AG losing 20%.

What are markets doing?

All European markets were struggling on Thursday, with the Stoxx Europe 600 (STOXX:XX:SXXP)  dropping 0.6% to 335.16, having finished down 0.1% the previous day.

France’s CAC 40 (PAR:FR:PX1) and Germany’s DAX 30 (XEX:DX:DAX) both lost 0.8% and Italy’s FTSE MIB (BORSA:IT:I945)  was 0.6% off the pace at 18,233.13.

In the U.K., the FTSE 100 index of leading shares (FTSE:UK:UKX)  was down by 0.3% at 6,714.13.

The euro (XTUP:EURUSD)  was up to $1.1382, having finished at $1.1466 late Wednesday in New York.The British pound (XTUP:GBPUSD)  was down to $1.2561 from $1.2745.

What is driving the market?

In a rare move, Apple downgraded its revenue projections to $84 billion for the quarter, about 9% less than the $91.3 billion estimate from analysts polled by FactSet.

In a letter to shareholders, Apple’s CEO Tim Cook attributed the projected fall to China’s slowing economy and recent U.S. tariffs on more than $200 million worth of Chinese goods. The company’s shares fell 7.6% to $146 in after-hours trading on Wednesday.

Asian markets were mostly down as a result of Apple’s announcement.

What stocks are active?

The technology sector led the top decliners in the Stoxx 600. Ams AG (SWX:CH:AMS) lost almost 20% on Thursday, while Dialog Semiconductor Plc (FRA:DE:DLG)   dropped by 7% and Infineon Technologies AG (FRA:DE:IFX)  lost 4%.

Royal Mail PLC (LON:UK:RMG)  was the top gainer for the Stoxx 600, jumping by just over 4%.

In the retail sector, Next PLC (LON:UK:NXT) gained 3%, while supermarket chains Tesco PLC (LON:UK:TSCO) added 2% and Marks & Spencer Group PLC (LON:UK:MKS)  rose by just under 2%.

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