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European shares hobbled as worries about Huawei fallout mount

Credit: Reuters - Business (Amazon FireT
Published on May 20, 2019 - Duration: 01:46s

European shares hobbled as worries about Huawei fallout mount

European stocks slipped on Monday as concerns about an escalating fallout from a U.S. crackdown on China's Huawei Technologies offset a slightly more positive tone on trade.

Francis Maguire reports.

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European shares hobbled as worries about Huawei fallout mount

European stocks slipped Monday (May 20) as concerns grow about a U.S. crackdown on China's Huawei.

The Trump administration added the tech firm to a trade blacklist last week, And Huawei now faces restrictions in how it does business with U.S. companies.

Google acted quickly and suspended some business with the Chinese group.

Shares in European chipmakers like Infineon Technologies dropped sharply, The Nikkei Asian review reported the German firm had stopped shipments to Huawei.

Shares were down 3.4% in early trade.

(SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The German chipmaker Infineon has a strong presence in the USA, and we know now that the USA has called for a boycott on network equipment from the Chinese service provider Huawei.

Rather than see Infineon's business suffer, they are prepared to blacklist Huawei." Worries over Huawei - and a profit warning from budget airline Ryanair weighed on benchmark indexes.

The pan-European STOXX 600 down 0.1% in early trading, The German DAX fell 0.17% (SOUNDBITE) (German) HEAD OF CAPITAL MARKET ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING: "The German stock market is on the ropes.

On the one hand, traders are pleased that new U.S. tariffs on European products have been delayed by 180 days, but that in no way means the uncertainty is over.

And then there is the big USA-Iran conflict.

It seems Trump needs a new campaign slogan." Europe's woes followed more positive signs from Asia, where shares reversed some of last week's heavy losses, after the U.S. said Friday (May 17) it would lift tariffs in North America.

The MSCI index of world shares, which tracks shares in 47 countries, rose 0.08%.

But it remains some 3.6% below its 2019 highs.

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