Broadcom's $2 billion warning rattles global chip sector | Calamatta Cuschieri

Today’s article gives an overview of the European and U.S. markets on Friday, together with news about global technology leader

The Maltese market closed in the green on Friday, with MSE Equity Total Return Index ending the session 0.963% higher, to 9,881.208 points. Best performer was Simonds Farsons Cisk plc, it jumped 14.13% to 10.50. Followed by International Hotel Investments plc and RS2 Software plc, which added 3.66% and 0.72% to close at 0.85 and 1.40 respectively. Biggest fall was seen from PG plc, it shed 3.66% to close at 1.58. Followed by Medserv plc and Bank of Valletta plc which slid 0.88% and 0.79% to close at 1.12 and 1.26 respectively. HSBC Bank Malta plc, GO plc, Malta International Airport plc and BMIT Technologies plc were active but closed unchanged.

Trade-sensitive technology stocks led losses in European markets on Friday after U.S. chipmaker Broadcom’s sales warning and disappointing industrial data out of China came as the clearest signs yet of the damage trade war may do to global growth. The pan-European STOXX 600 index closed down 0.4%, with Frankfurt’s DAX index, which lists Europe’s largest chipmaker Infineon, falling 0.6%.

All major U.S. stock indexes closed lower Friday after the Dow failed to defend a late comeback, with tech shares under pressure following lower guidance by chip giant Broadcom Inc. The Dow Jones Industrial Average fell 0.1%, to end at 26,089.61, while the S&P 500 index declined 0.2%, to 2,886.98. The tech-laden Nasdaq Composite Index shed 0.5%, to close at 7,796.66.

Tech conglomerate Broadcom Inc. pretty much wiped out remaining hopes for a substantial rebound in the semiconductor market this year

Broadcom Inc sent a shockwave through the global chipmaking industry on Friday with its forecast that U.S.-China trade tensions and the ban on doing business with Huawei Technologies would knock $2 billion off the company’s sales this year.

The forecast, included in the company’s second-quarter results late on Thursday, was the hardest evidence yet of the damage President Donald Trump’s trade war with Beijing may do to the global industry.

Shares in Broadcom fell as much as 8.6%, wiping more than $9 billion off the market value of the company, previously based in Asia but now with its headquarters and main listing in the United States.

Broadcom was not the only company that had been predicting a stronger second half of the year. Nearly every chip maker has predicted at some point that revenue growth would return in the second half, though the target had already begun to slip with earlier second-quarter returns.

 

This article was issued by Nadiia Grech, junior trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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