* Brexit developments sap share rally, pound yanked off
$1.30
* Texas Instruments revenue forecast hits chipmakers
* China says report of HK's Lam being replaced has "ulterior
motives"
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, Oct 23 (Reuters) - World stock markets struggled on
Wednesday, as hopes faded that a Brexit deal would be wrapped by
next week and a profit warning from Texas Instruments pulled
down technology shares.
It was hard to pick which was weighing on sentiment more in
European trading. The pound was yanked down to $1.2850 from
$1.30 GBP= after UK lawmakers put the brakes on the
government's Brexit plans again on Tuesday. Meanwhile, Europe's tech sector .SX8P fell as much as 1.4%
as STMicroelectronics STM.MI , Dialog Semiconductor DLGS.DE
and Infineon IFXGn.DE all dropped after Texas Instruments
slumped 10% TXN.O in after-hours Wall Street trading.
Major Asian chipmakers, including Taiwan's TSMC 2330.TW
and South Korea's SK Hynix 000660.KS , had fallen overnight too
on worries the industry was being squeezed both by a downturn in
global demand and by the U.S.-China trade war.
"When there are tensions in trade and obstacles to trade,
what do businesses do? They become more cautious. And they pull
back," Rafael Lizardi, Texas Instruments' chief financial
officer, said after the company's results.
With investors seeking out safer assets again, the Japanese
yen climbed to a one-week high of 108.25 per dollar JPY= and
the Swiss franc CHF= gained early in Europe. FRX/
Adam Cole, a strategist at RBC Capital Markets, said Brexit
was driving a "general risk-off tone." Others pointed to the
growing likelihood British Prime Minister Boris Johnson would
now push for a snap election. "Things could change very quickly today, depending on the EU
response," Cole said, referring to how much EU leaders would be
prepared to extend the Brexit deadline beyond Oct. 31.
But he added he didn't see "much downside" risk for sterling
now, with a no-deal Brexit off the table.
The pound has surged 4.5% this month which, if it holds the
gains, will be its best month since January last year.
Receding worries about a no-deal Brexit also underpinned the
euro at $1.1122 EUR= , just below a two-month high of $1.1180,
though it was also down to the dollar staying subdued before an
expected third U.S. interest rate cut of the year next week.
In a mirror image of the pound and euro, October is on
course to see the biggest monthly fall in the dollar index
.DXY since January 2018. It has only fallen for six of the
months during that period too.
CAT WARNING
Equities on Wall Street looked set for another sluggish
start. Hopes for forgetting Texas' woes were already dashed as
digger giant Caterpillar CAT.N blamed a weak global
contruction market as it cut its profit forecast after a hefty
13.5% fall in third quarter profits. In commodity markets, oil prices fell after data showed U.S.
crude inventories grew more than expected last week.
But prices generally held firm after China
signalled hopes for progress in upcoming trade talks with the
United States and OPEC and its allies considered deeper cuts in
production.
Brent crude LCOc1 futures fell 0.52% to $59.39 a barrel.
U.S. West Texas Intermediate crude CLc1 lost 0.81% to $54.04
per barrel.