European shares drop after a round of disappointing corporate financial updates

On Wednesday European stocks saw a fall, as sentiment across equity markets worldwide was dampened after a round of disappointing corporate earnings.

The Stoxx Europe 600 skid 0.4% to 401.00, led by a more than 1% drop in technology shares.

Germany’s DAX shed 0.3% to 11,567.21 and France’s CAC 40 lost 0.2% to 5,094.37.

Dim financial updates from Apple Inc., Microsoft Corp., IBM and United Technologies Corp. in the U.S. on Tuesday pressed U.S. markets lower, Asian markets got caught under a selling pressure overnight.

Even though iPhone sales rose 35 percent to 47.5 million units in the period that ended in June, the result fell short of the 48.8 million shipments expected by analysts.

That, plus a revenue forecast for the current period that missed estimates, drove the sharp post-earnings plunge in Apple’s shares since January 2013, when Chief Executive Officer Tim Cook was under scrutiny over his ability to keep up Apple’s pace of innovation and sales growth, Bloomberg comments.

“Having been perceived as an indication of the global economic slowdown, lower-than-expected iPhone shipments and underwhelmed sales forecasts for Q4 increased anxiety that U.S. earnings may remain gloomy for some time, especially with 21% contraction in overall Chinese sales,” said Lewis Sturdy, sales trader at London Capital Group, in a note.

Shares of ARM Holdings PLC gave up 3.5% in London, with the chip designer hurt after its client, Apple, issued a disappointing sales outlook.

ARM shares weighed on the U.K.’s FTSE 100, with the benchmark falling 0.8% to 6,708.19.

Shares of another Apple supplier, Germany’s Dialog Semiconductor, also saw a drop, by 5.7%.

Lower Apple product sales signify that the investor sentiment got a serious hit, says Sturdy.