(Reuters) - European stocks recorded broad-based losses on Monday, as a U.S. crackdown on China’s Huawei Technologies rekindled concerns about worsening global trade and wilted the continent’s trade-exposed tech and auto stocks.
Global risk appetite was jolted after Reuters reported Alphabet Inc’s Google suspended some business with Huawei, while Apple Inc supplier Lumentum Holdings Inc said it had discontinued all shipments to Huawei.
“Seeing as the United States has taken a tough stance against Huawei, traders are not hopeful that the U.S.-China trade dispute will be resolved quickly,” David Madden, market analyst at CMC Markets UK, wrote in a note.
“The rally at the back end of last week is starting to look like a relief rally, and this move could be the beginning of the next major move lower.”
The pan-European Euro STOXX 600 fell 1.1% and has shed 3.5% so far in May, on course to post 2019’s first monthly loss, largely on fears of slower growth as trade ties chill.
The volatility gauge on euro zone blue-chips jumped, lifting off Friday’s two-week closing low.
Germany’s DAX dropped 1.6%, while French stocks shed 1.5%. Italian stocks slid 2.7%, weighed on by Intesa Sanpaolo declining as it traded ex-dividend.
Tech stocks were the STOXX 600’s top losers, diving 2.8%. AMS, STMicroelectronics, and ASML were down between 6.3% and 13.4% as fears of a disruption to the industry’s global supply chain grew.
German chipmaker Infineon trimmed intra-day losses to end 4.8% lower after denying a report in Japan’s Nikkei daily that it had suspended deliveries to Huawei.
Stocks of tariff-sensitive auto-makers and their suppliers shed 2% to clock their lowest closing level in more than a month and a half.
Banks fell 1.6%, with Deutsche Bank tumbling 2.9% to a record closing low.
The New York Times on Sunday reported anti-money laundering specialists at the German lender recommended in 2016 and 2017 multiple transactions involving entities controlled by U.S. President Donald Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crimes watchdog.
The newspaper, citing five current and former Deutsche Bank employees, said bank executives rejected their employees’ advice and the reports were never filed with the government. The lender has denied the report.
Viennese stocks slid 1.4% after Austria’s president called for a snap election in September following the resignation of the country’s far-right vice chancellor over a video sting.
Travel and leisure stocks slid 1.4%, with Ryanair diving 4.6% after the low-cost airline posted its weakest annual profit in four years and said earnings could fall further.
“It looks like it will be a tough summer, with rising fuel costs and more strikes, even without Brexit making things worse,” Chris Beauchamp, chief market analyst at IG, wrote in a note.
Telecom stocks were the STOXX 600’s only gaining sub-sector, rising 0.8%. Vodafone Group climbed 1.7% on the day, after recording its lowest closing level in close to 10 years on Friday.
Reporting by Aaron Saldanha, Agamoni Ghosh and Amy Caren Daniel; Editing by Alexander Smith, Alison Williams and Frances Kerry