(Reuters) -U.S. medtech stocks fell on Thursday after the U.S. Commerce Department opened a probe into imports of medical devices, a move that could ultimately lead to tariffs.
Companies like GE HealthCare, Becton Dickinson, Stryker, Insulet, Intuitive Surgical and ResMed were among the worst performers on the S&P Health Care Equipment index, down between 3% and 9%.
Abbott slipped 1.6% and Medtronic fell 1.7%, with the S&P Health Care Equipment index dropping 1.6% on Thursday.
Medtech shares have been
volatile this year, pressured by supply chain disruptions, cost inflation and slower demand in some international markets.
Analysts said the probe could have implications for a range of medical technology companies with globally sourced supply chains and could create a modest overhang for the stocks.
Earlier this month, the Secretary of Commerce launched a Section 232 investigation under the Trade Expansion Act of 1962 to assess how imports of personal protective equipment, medical consumables, and medical devices impact national security.
Section 232 allows the President to restrict imports if they are found to "threaten to impair" U.S. national security.
While the list of MedTech products covered is broad, we do not think it is right to hit the panic button in response to the announcement, J.P. Morgan analyst Robbie Marcus said in a note.
The department said it would make recommendations within 270 days.
"The U.S. is home to the world's leading and most innovative medical device industry, and we share the Administration's interest in further strengthening healthcare resilience and manufacturing locally," a GE HealthCare spokesperson said.
Shares in healthcare and industrial sectors across Europe also dipped.
(Reporting by Puyaan Singh, Sneha S K, Mrinalika Roy in Bengaluru; Editing by Tasim Zahid)
