LONDON (ShareCast) - (Sharecast News) - Stockmarkets across the Continent are seeing heavy losses amid a rout in the technology space after the US blacklisted Chinese telecommunications equipment manufacturer Huawei on Friday, banning US companies, including chipmakers, from supplying it with much needed components.
At the weekend, reports had surfaced that Google would limit the services that Huawei could make available on its phones even as it emerged that US officials might recalibrate some of their measures against the Chinese company, so that it could continue servicing its existing clients in the US.

"The broadening of the trade war to the technological sector makes it extremely difficult to gauge the implications for economic activity going forward. By now, we have become familiar with the estimates provided by a number of institutions (IMF, OECD etc.) that, under simplified assumptions, tried to model the economic impact of a trade war," said Marco Valli, Head of Macro Reserch at UniCredit Group.

"But what could happen if we add tech protectionism and the risk of escalation there? I suppose very few people would have a reasonably clear idea."

As of 1311 BST, the benchmark Stoxx 600 was down 1.33% to 376.44, alongside a drop of 1.68% to 12,035.93 for the German Dax.

Milan's FTSE Mibtel was easily the worst performer, retreating by a hefty 2.77% to 20,521.18, as multiple heavyweights, including Generali, Eni and Fiat began trading without the rights to their latest dividend.

Technology was the weakest segment of the market, with the corresponding Stoxx 600 sector gauge falling by 2.60%, with shares in German-based Infineon off by 4%, those in Austria's AMS declining by over 11% and ST Microelectronics's down almost 9%.

Meanwhile, a sub-index of Travel&Tourism stocks was falling by 1.73%.

In the background, investors were waiting on the results of the elections to the European Parliament, which were set to begin on Thursday.

On that note, over the weekend Italian deputy prime minister, Matteo Salvini, called for a revamp of the European Union's fiscal rules, which he claimed would make a 15% flat tax in Italy possible.

And on Saturday, Austrian nationalist vice-chancellor, Heinz-Christian Strache, stepped down after being caught on video offering political favours to journalists posing as heirs to a Russian oligarch.

Further afield, Ukraine's newly-appointed President, Volodymyr Zelenskiy, called snap parliamentary elections for October.

According to Germany's Ministry of Finance, factory gate prices in the euro area's largest economy edged past forecasts in April, rising at a year-on-year pace of 2.5% (consensus: 2.4%), led by a 6.6% jump in energy prices.

For later in the day, investors were waiting for a reading on Belgian consumer confidence in May.

No major economic reports were scheduled for release later in the day Stateside, although Philly Fed President, Patrick Harker, was due to deliver a speech at 100 BST.

On the company front, stock in Ryanair was trading nearly 10% lower after Europe's largest airline posted a fourth consecutive drop in annual profits and said it had "zero" visibility for the second half of the financial year just started.

Thomas Cook was also under severe pressure again alongside steep losses on debt issued by the travel operator after Sky News reported that one of its payment intermediaries wants to extend the period for which it retains holidaymakers' payments for trips.

Shares of German chipmaker Infineon were trading lower amid contradictory reports about whether if it had cut shipments to Huawei or not.

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