Europe's STOXX 600 falls for third straight session as tech drags
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STOXX 600 down 0.5%
ASML falls as China risks cloud solid Q2 earnings
Roche jumps on early trial success of second obesity drug
Updated at 1600 GMT
By Shristi Achar A, Pranav Kashyap and Shashwat Chauhan
July 17 (Reuters) -European shares closed lower for a third straight day onWednesday, with chip stocks sliding as investors remained wary of potential U.S.- China trade tensions, with focus now shifting to the European Central Bank's upcoming rate decision.
The pan-European STOXX 600 index .STOXX closed 0.5% lower, touching one-week lows withthe technology sub-index .SX8P falling 4.5%, the biggest single-day drop since December 2022.
Shares of Dutch firm ASML ASML.AS, the biggest supplier of computer chip-making equipment in the world, shed almost 11%, its largest single-day percentage drop in over four years, driven by concerns that U.S. government pressure could lead to tighter restrictions on its exports to China,overshadowing its second-quarter earnings numbers.
Bloomberg News reported that amid resistance from allies to its chip crackdown, the U.S. is considering the most toughest trade restrictions if companies keep providing China with access to advanced semiconductor technology.
Other semiconductor stocks also lost ground. ASM International ASMI.AS and BE Semiconductor BESI.AS both fell more than 7% each.
Chris Beauchamp, chief market analyst at IG Group, attributed the fall in chip stocks to "a trifecta of China growth and demand (concerns), the geopolitical situation, and also the fact that these stocks have come quite a way in a very short space (of time)."
Despite Wednesday's losses, the tech index is still up close to 13% for the year, amongst the best-performingSTOXX 600 sectors.
On the data front, eurozone inflation for June stood at 2.5% year-on-year. The data comes ahead of the European Central Bank's rate-setting meeting later in the week, where it is widely expected to hold its rates steady. 0#ECBWATCH
In the UK, inflation defied forecasts for a slight fall and held at 2% in June. UK's blue-chip FTSE 100 .FTSE closed 0.3% up. .L
Among other stocks, Adidas ADSGn.DE gained 2.1% after theGerman sportswear maker increased its full-year earnings forecast after a better-than-expected second quarter. Rival Puma PUMG.DE also rose 2.2%.
Roche ROG.S jumped 5.8% after the Swiss drugmaker said a second drug candidate from its purchase of Carmot Therapeutics yielded positive results in an early-stage trial, asserting itself as a late contender in the race to develop obesity drugs.
Shares of rival Novo Nordisk NOVOb.CO, Europe's largest listed company, fell 5.3%.
Danish hearing aid maker Demant DEMANT.CO dropped 14.8% after cutting its full-year outlook, while Swedish air treatment solutions provider Munters MTRS.ST advanced 22.4% after beating expectations on second-quarter profit.
Reporting by Shristi Achar A, Pranav Kashyap and Shashwat Chauhan in Bengaluru; Editing by Varun H K, Shounak Dasgupta and Tasim Zahid
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