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Oct 18 Reuters European stocks inched lower on Wednesday as deepening fears over an escalation in the Middle East conflict and a drop in shares of chipmakers after ASML39;s lacklustre forecast overshadowed support from upbeat Chinese economic data.

The panEuropean STOXX 600 index was down 0.2 by 827 GMT, falling for the second straight day.

A strike on a Gaza hospital that killed hundreds of Palestinians raised the stakes for U.S. President Joe Biden39;s visit to Israel.

ASML Holding lost 1.5 as the semiconductor equipment maker reported lowerthanexpected orders and warned of flat sales next year.

Shares of other chipmakers such as ASM International, Aixtron and BE Semiconductor also shed between 1.3 and 1.5, dragging Europe39;s technology sector down 0.7.

Today, the disappointing semiconductor results are going to be the one dominating the news because it39;s a big and important sector for Europe, said Anthi Tsouvali, multi asset strategist at State Street Global Markets.

In general, earnings expectations remain high and they seem to be very optimistic for a region which is an energy importer. If energy prices continue to climb higher, that39;s going to be an issue.

The burgeoning uncertainty over the Middle East war, a slew of mixed earnings reports…