European stocks tumbled on Tuesday morning following a weak handover from Asia, as Apple’s revenue guidance warning rocks electronics supplier shares and coronavirus fears persist.
The pan-European Stoxx 600 fell by 0.8% in early trade, with tech stocks shedding 1.6% to lead losses as all sectors entered negative territory.
Tech giant Apple on Monday warned that it does not expect to meet its second-quarter revenue forecast due to lower global iPhone supply and weakened Chinese demand and production as a result of the coronavirus outbreak.
As of Monday night, China’s National Health Commission said a total of 72,436 people are confirmed to have contracted the new coronavirus and 1,868 have died.
Apple suppliers led a sell-off in Asia overnight, with shares in Hong Kong, Japan and South Korea all tumbling more than 1.3%. Wall Street also retreated from record highs.
HSBC reported on Tuesday that it had missed 2019 earnings expectations to record a 32.9% fall in pre-tax profit. Europe’s largest bank by assets reported a full-year pre-tax profit of $13.35 billion, well shy a Refinitiv forecast of $19.83 billion. The bank also announced a major overhaul that will result in 35,000 job cuts over the next three years. HSBC’s London-listed shares fell 3.9% at the start of trading.
Euro zone finance ministers met Monday to discuss fiscal policy options in a bid to boost the bloc’s sluggish economy, with fears of a downturn growing in the wake of the coronavirus outbreak.
On the data front, U.K. employment and labor productivity figures are expected at 9:30 a.m. London time before the ZEW economic sentiment index for Germany and the euro zone is published at 10 a.m.
Stocks on the move
Individual share price action was also being driven by earnings reports and news of corporate deals across the euro zone.
French rail company Alstom has agreed to acquire the rail division of Canada’s Bombardier in a deal worth up to $6.7 billion. Alstom shares slid 2.3% lower in early trade.
Italian bank Intesa Sanpaolo on Monday launched a 4.86 billion euro ($5.3 billion) takeover bid for domestic rival Ubi Banca. Ubi Banca shares surged 22% while Intesa added 2.6%.
