Asian markets mostly lower as tech firms soured by Apple

3rd January, 2019 09:43:25 printer

HONG KONG: Most Asian markets extended the previous day’s sharp losses Thursday with technology firms tumbling after Apple slashed its revenue forecasts blaming slowing China sales.

The yen soared against a number of other currencies including the dollar, euro, Australian dollar and Turkish lira in a flash crash fuelled by the Apple announcement, reports AFP.

In early trade bargain-buyers capitalised on Wednesday’s hammering across Asia but were unable to sustain momentum with sentiment weak owing to uncertainty over a number of issues including the China-US trade war, China’s economic woes, the US government shutdown and Brexit.

Wall Street and European markets mostly recovered from early losses to end slightly higher but Apple’s announcement that it expected to earn less than expected in the key December quarter sent shudders through markets.  The firm, which was already under pressure over signs that sales of its new iPhone were coming up short, blamed sluggish demand in China for the cut and cited the US trade war as a factor.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” chief executive Tim Cook told investors.

He told CNBC the tariffs row had put “additional pressure” on an already slowing Chinese economy, resulting in lower store and online traffic. The firm’s shares — already down about a third from their record high in March –

– dived seven percent in after-hours trading.

Asian tech firms took a hit from the news, with Hong Kong-listed Sunny Optical and AAC Technologies down 6.8 and 5.4 percent, while Apple supplier TSMC shed 1.8 percent in Taipei, with Foxconn 0.2 percent off.

But on broader markets Hong Kong fell 0.3 percent after tanking almost three percent Wednesday, while Shanghai was marginally lower following a more than one percent drop after more weak Chinese economic data.

Seoul retreated 0.8 percent, Singapore was one percent down while Wellington gave up 0.9 percent, with Taipei and Mumbai also in negative territory.

Sydney jumped more than one percent while Manila surged 2.2 percent. Tokyo was closed for a holiday.

London fell 0.4 percent in early trade while Paris and Frankfurt each lost 0.8 percent.

Banny Lam, head of research at CEB International Investment Corp, warned of continued volatility.

“There are a lot of uncertainties lying ahead,” Lam told Bloomberg News.

“The markets will likely be stuck in a downtrend over the next few weeks.”

The news from Apple sparked a sell-off in the currency market with the yen, a safe haven in times of turmoil, soaring around 3.7 percent to 104.87 against the dollar before the greenback recovered later in the day.

The Japanese unit also soared to a 10-year high against the Australian dollar, which is seen as a bellwether for China, and the euro, while the Turkish lira was down a similar amount.