Chips, Iran worry European stock markets

Credit: REUTERS/STAFF

Worries over the Middle East and another chip sector warning on trade pressured European shares on Tuesday, ahead of a key two-day Federal Reserve meeting which traders expect to clear the way for a cut in interest rates.

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June 18 (Reuters) - Worries over the Middle East and another chip sector warning on trade pressured European shares on Tuesday, ahead of a key two-day Federal Reserve meeting which traders expect to clear the way for a cut in interest rates.

The United States on Monday announced the deployment of about 1,000 more troops, citing concerns about a threat from Iran and stirring nerves on financial markets already concerned by the ramping up of trade tensions with China.

German chipmaker Siltronic WAFGn.DE tumbled 8% after it was the latest to warn U.S. restrictions on exports to China would hurt business, saying Q2 sales would be "significantly below" the first quarter and were likely to decline further.

The pan-European STOXX 600 index .STOXX fell 0.17% by 0708 GMT, with Britain's FTSE 100 .FTSE outperforming with a 0.2% rise.

The profit warning comes hot on the heels of U.S. chipmaker Broadcom's shock statement last Thursday that trade issues would knock $2 billion off 2019 sales.

Another German chipmaker Infineon Technologies IFXGn.DE and STMicroelectronics STM.MI, dropped 5.8% and 2.2% respectively, pulling the technology sector .SX8P 0.8% lower.

Infineon's move, however, came after it launched a 1.5 billion euro capital increase to help fund its acquisition of Cypress Semiconductor.

(Reporting by Amy Caren Daniel and Medha Singh in Bengaluru; editing by Patrick Graham)

((Amy.CarenDaniel@thomsonreuters.com ; within U.S. +1-646-223-8780; outside U.S. +91 80 6749 9250 ; Reuters Messaging: Amy.CarenDaniel.thomsonreuters.com@reuters.net))

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