European stocks close lower after tech sell-off; Sodexo down 4.5%

  • The pan-European Stoxx 600 closed provisionally almost half a percent lower with almost every sector in negative territory.
  • Apple is looking at making its own chips for Mac computers, a development that hit European chipmakers.
  • On Wall Street, stocks rose as technology shares cut sharp losses from the previous session.

European equities closed lower Tuesday amid continued fears of a potential trade war and regulation for the technology sector.

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The pan-European Stoxx 600 closed provisionally almost half a percent lower with almost every sector in negative territory. Overall, the index recovered slightly from earlier losses that led the benchmark to trade about 1 percent off.

Technology stocks were among the worst performers, continuing the bearish sentiment seen on Wall Street. Market players fear that there will be new and tougher rules on the sector after a data scandal involving Facebook and comments from President Donald Trump on Amazon's impact on traditional retailers. Furthermore, Apple is reportedly looking at making its own chips for Mac computers which hit the stocks of European chipmakers. Austria Microsystems, an Apple supplier, saw shares over 2 percent lower.

Financial services was also among the worst-performing sectors. According to Reuters, China's banking regulator has started inspecting loans to large clients.

Looking at individual stocks, Sodexo dropped 4.5 percent. The firm saw its rating downgraded by several brokers after the company reported lower expectations for 2018. GKN also fell 3.6 percent after Melrose confirmed a $11 billion takeover of the British company.

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On Wall Street, stocks rose as technology shares cut sharp losses from the previous session. Fears of a trade war and tougher regulation on technology companies sent stocks plunging Monday, with the Nasdaq closing in correction territory for the first time Monday. Global trade tensions became more apparent on Monday with Chinese authorities imposing tariffs on 128 American products, totaling about $3 billion.

In corporate news, Air France is expected to operate about 75 percent of its flights as its workers go on strike Tuesday. The strike will also affect the rail network. Air France shares were more than 4 percent lower.

Meanwhile, 21st Century Fox has announced new proposals to address concerns over media plurality in the U.K., where it made a bid to buy 61 percent of Sky. The British broadcaster was 2 percent higher.

In terms of data, the euro zone's IHS Markit manufacturing numbers fell to an 8-month low in March to 56.6, according to new data. However, the figure stood well above the 50 line, which separates growth from contraction.