STOXX 600 drops for fifth day, Nvidia drags European chip stocks

For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window

Updated at 0930 GMT

By Joao Manuel Vicente Mauricio

Nov 21 (Reuters) - Automobile stocks led losses in Europe on Thursday, with geopolitical tensions weighing on overall market sentiment and keeping some safe-haven bids afloat, while chip stocks took a hit after sector bellwether Nvidia's disappointing forecast.

The pan-European STOXX 600 index .STOXX was down 0.6%, as of 0930 GMT, on track for its fifth straight session of declines amid uncertainties around the escalating Ukraine-Russia conflict.

"It doesn't feel like the (Ukraine-Russia) story has developed sufficiently for there to be a marked risk-off ... But it's just going to keep investors cautious whilst we wait for any further developments," said Fiona Cincotta from Citi index.

Safe-haven bids have been on the rise, with gold XAU=, the Swiss franc CHF= and the dollar =USD edging up on the day.

Despite hitting record highs earlier this year, the STOXX 600 has sharply fallen behind its U.S. counterpart S&P 500 .SPX in 2024, also dented by likely domestic impacts of Donald Trump's U.S. presidential victory, concerns over Chinese spending and the euro zone's economic woes.

While an ECB policymaker said tariff hikes under Trump do not shift Europe's inflation outlook, a Federal Reserve official noted it is too early to start assessing the election impact on monetary policy.

Auto .SXAP was the worst-hit sector, down 1% and on track for the top weekly laggard. Analysts have highlighted the sector is in line to be hit hard by any potential trade tariffs from Trump. Wage talks at Volkswagen VOWG_p.DE were also under investors' radar.

European chip stocks ASML ASML.AS and BE Semiconductor BESI.AS were down 1% each, with the world's largest company by market value, Nvidia NVDA.O, forecasting its slowest revenue growth in seven quarters.

"There is still optimism surrounding the sector ... It's not that we've seen anything really disastrous," Cincotta added.

The AI chip leader's shares were down 4% in U.S. premarket trading.

However, Soitec SOIT.PA jumped 18% after the French semiconductor materials supplier's half-year results, limiting the tech sector's .SX8P losses.

CTS Eventim EVDG.DE slumped 10% following the German ticketing group's nine-month results, while JD Sports Fashion JD.L slid 15% after the sportswear retailer warned that its annual profit would come in at the low end of its guided range.

On the flip side, the insurance sector .SXIP was the only sectoral gainer, boosted by a 2% rise in Zurich Insurance ZURN.S after the company's upbeat three-year targets, and a 3% rise in Poland's PZU PZU.WA following third-quarter results.

Halma HLMA.L was up 9%, as the health and safety device maker reported its half-year results.

(Reporting by Ankika Biswas in Bengaluru and Joao Manuel Mauricio in Gdansk; Editing by Rashmi Aich and Maju Samuel)

((Ankika.Biswas@thomsonreuters.com;))