UPDATE 1-Apple suppliers dent European shares as equity rally falters

  • Reuters
  • Stock Market News
UPDATE 1-Apple suppliers dent European shares as equity rally falters
Credit: © Reuters.

* STOXX 600 dips 0.3 pct

* Apple iPhone delayed shipping weighs on suppliers

* Ams, STMicro, Dialog Semi fall

* Richemont , Swatch slip after results, Apple watch

* Covestro rises after Bayer sells shares (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

By Helen Reid

LONDON, Sept 13 (Reuters) - European shares faltered on Wednesday as a global equity rally showed signs of flagging, with Apple suppliers struggling after the new iPhone release disappointed with a later than expected shipping date.

The pan-European STOXX 600 .STOXX dipped 0.3 percent as weakness in chipmakers was compounded by a drop in miners .SXPP . MET/L

Euro zone stocks and blue chips .STOXX50E held steady, while Germany's DAX .GDAXI , which touched its highest in nearly two months on Tuesday, fell back 0.1 percent.

Chipmakers supplying to Apple AAPL.O were among the worst performers, with AMS AMS.S down 3.9 percent, while Dialog Semiconductor DLGS.DE slipped 1.7 percent and STMicro STM.MI fell 1.1 percent.

Traders said their shares were under pressure due to Apple's new $999 iPhone X shipping later than expected, on November 3. The price tag could also dent demand for the device in markets such as China. the iPhone coming in around $1,000 it will be interesting to see how healthy demand is," said Mike Bell, global market strategist at JP Morgan Asset Management.

"If it's relatively healthy I think it shows that there is still quite a lot of pricing power for U.S. companies and that consumers have confidence."

Chipmakers have been the best performing among Europe's tech stocks this year, accounting for a large chunk of the sector's outperformance. AMS shares have gained 165 percent year-to-date.

Richemont CFR.S fell 1.6 percent despite reporting a sales beat for its first half thanks to a recovery in the Asian luxury market. UBS analysts said weaker retail growth may weigh on sentiment. Swatch UHR.S also fell 2.5 percent, with some traders citing concerns that Apple's new watch could also dent the watchmaker's shares.

The merging eyewear and lens makers Luxottica LUX.MI and Essilor ESSI.PA were also among the biggest fallers, down 1.9 to 2.1 percent. EU antitrust regulators were set to tell the firms of concerns they have over the merger this week. 1COV.DE was among a handful of risers, up 2.7 percent after German drugs and pesticides group Bayer BAYGn.DE sold a 9.4 percent stake in the firm, in order to finance part of its acquisition of Monsanto (NYSE: MON ) MON.N . stocks were struggling for a further boost after sinking 7 percent over the summer months.

"Our view is that European equities still have potential for upside," said JPMAM's Bell.

"The earnings outlook is quite strong still; Europe has among the highest operating leverage of any major market so if the global economy remains strong that should drive margin expansion and earnings growth."

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