(Reuters) – European shares dropped on Tuesday as a revenue warning from Apple Inc (AAPL.O) sent shockwaves through the tech sector, hammering iPhone parts makers and underlining the impact of the coronavirus outbreak on global supply chains.

Apple’s Frankfurt-listed shares (AAPL.F) dropped nearly 5% after the company said it would miss its March-quarter sales outlook due to the epidemic, which has killed more than 1,800 people and forced businesses to shut operations.

Shares of STMicroelectronics NV (STM.MI) and Dialog Semiconductor (DLGS.DE), which supply components to Apple, fell 2.7% and 5.5%, respectively.

The technology-heavy German stock index .GDAXI plunged 0.8%, while the European tech index .SX8P fell 1.4%.

While the European tech index has risen more than 7% this year on hopes of demand recovering on the back of easing global trade tensions, the virus outbreak may reverse those gains given China’s large presence in the technology supply chain.

“There are hundreds of other companies who are in this predicament, with manufacturing as well as stores in China,” said Neil Campling, head of TMT research at wealth manager Mirabaud.

“The main effect of Apple having gone first will be to force others to follow soon or risk being accused of a cover-up.”

The pan-European STOXX 600 index fell 0.6% by 0951 GMT, having ended at a record high on Monday after China outlined fresh stimulus measures to mitigate the virus’ economic impact.

However, Apple’s (AAPL.O) warning, along with news of a slower-than-expected recovery in the firm’s Chinese factories, swiftly culled any optimism.

Other China-exposed sectors in Europe, such as automobile .SXAP and basic resources .SXPP, dropped more than 1% each. The two depend heavily on Chinese demand for their goods, with several car makers also manufacturing parts in the country.

Bucking the trend, Italian stocks .FTMIB rose on the back of bank shares after Intesa Sanpaolo (ISP.MI) made a surprise 4.86 billion euro ($5.26 billion) bid for smaller rival UBI Banca (UBI.MI). UBI surged nearly 22% and was the top gainer on the STOXX 600.

British lender HSBC Holdings (HSBA.L) fell 4.7% and was one of the biggest drags on the STOXX 600 after it said it would shed $100 billion in assets and cut 35,000 jobs over three years in a drastic overhaul.

Defensive sectors such as utilities .SX6P and real estate .SX86P were among the few gainers.

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