European and Asia stocks dip as chipmakers lead declines

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European and Asian stocks fell on Monday as investors worried that weak global demand could weigh on the chipmaking industry.

In Europe, the Stoxx Europe 600 index fell 0.5%, the Paris Cac 40 index fell 0.6%, and Frankfurt’s Dax index opened down 0.3%, dragged down by health care and utility stocks.

In Asia, Hong Kong’s Hang Seng Index and South Korea’s Kospi fell 1%, while Japanese markets were closed for a holiday. China’s CSI 300 index was the only gainer in the region, rising 0.5%.

The moves echoed a sell-off led by technology stocks on Wall Street in the previous session as Taiwan’s TSMC, the world’s largest contract chipmaker, told its key suppliers to delay deliveries of high-end chipmaking equipment.

Taiwan Semiconductor Manufacturing Co. fell 3.2% on Monday as the chipmaker has warned of a further slowdown in the chipmaking industry as a recent boom in artificial intelligence technology struggles to make up for broader economic headwinds and China’s stalled recovery.

Oslo-listed Nordic Semiconductor fell 14.6% after lowering its third-quarter revenue forecast.

Shares of Dutch chipmaker ASML fell 0.9%, STMicroelectronics fell 1.2% and BE Semiconductor fell 2%. Shares of South Korea’s SK Hynix fell 2.8%.

The moves come as traders prepare for interest rate decisions from the world’s three major central banks this week. In the United States, the Fed is expected to keep its target range of 5.25% to 5.5% unchanged.

Futures contracts tracking Wall Street’s benchmark S&P 500 index rose 0.1%, while those tracking the tech-heavy Nasdaq 100 index were flat ahead of the New York open.

The Bank of England is also meeting this week and is expected to raise its benchmark bank rate by a quarter of a percentage point to 5.5%, while the Bank of Japan is expected to keep rates unchanged at minus 0.1%.

Oil prices hit their highest levels this year after top producers announced further production cuts, and headline inflation data in the U.S. and Europe have edged up recently, adding to pressure on policymakers.

Brent crude rose 0.7% to $94.57 a barrel on Monday, still near its highest level since November 2022, while U.S. West Texas Intermediate crude rose 0.9% to $91.55 a barrel.