BCN-02, 03 Asia markets stage slight recovery but tech firms soured by Apple

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BCN-02

ASIA-MARKETS

Asia markets stage slight recovery but tech firms soured by Apple

HONG KONG, Jan 3, 2019 (BSS/AFP) – Most Asian markets rose Thursday after
the previous day’s sharp losses but technology firms fell after Apple slashed
its revenue forecasts blaming slowing China sales.

The yen pared early sharp gains from a flash crash, which saw the dollar
briefly plunge to its lowest level since March after the Apple announcement,
while the Australian dollar hit a 10-year low against the greenback.

Investors trod cautiously as bargain-buyers capitalised on Wednesday’s
hammering across Asia, while sentiment remains weak owing to uncertainty over
a number of issues including China-US trade, 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 send 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 citing 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 both down more than two percent, while Apple
supplier TSMC shed almost one percent.

– Flash crash –

But on broader markets Hong Kong gained 0.4 percent after tanking almost
three percent Wednesday, while Shanghai added 0.7 percent following a more
than one percent drop after more weak Chinese economic data.

Sydney led gains, rallying more than one percent, while Seoul, Manila and
Jakarta were also higher.

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ASIA-MARKETS 2 LAST HONG KONG

Singapore, Wellington and Taipei were in negative territory, while Tokyo
was closed for a holiday.

Despite the much-needed gains, Banny Lam, head of research at CEB
International Investment Corp, warned of continued unease.

“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 to around 107.50 later in
the morning.

The Japanese unit also briefly soared about 3.5 percent against the
Australian dollar, which is seen as a bellwether for China, and more than
four percent on the euro.

“The Apple news is driving safe haven flows, which have seemingly
triggered a flash crash in forex,” Brad Bechtel, global head of foreign
exchange at Jefferies LLC, said.

Analysts suggested that a rush to the safety of the yen saw it rise, which
then caused programmes to kick in that were set up by yen short traders to
prevent them losing cash.

The flash crash also saw the greenback surge around four percent against
the Australian dollar to its highest level since 2009. The Aussie has been
battered by slowing growth in China, a key export destination for the
country’s commodities sector.

“Aluminium and copper were both off by more than two percent,” said
analysts at NAB Markets Research.

– Key figures around 0230 GMT –

Hong Kong – Hang Seng: UP 0.4 percent at 25,226.12

Shanghai – Composite: UP 0.7 percent at 2482.32

Tokyo – Nikkei 225: Closed for public holiday

Dollar/yen: DOWN at 107.69 yen from 109.10 yen at 2130

Euro/dollar: UP at $1.1347 from $1.1346

Pound/dollar: DOWN at $1.25.53 from $1.2611

Oil – West Texas Intermediate: DOWN $1.11 at $45.43 per barrel

Oil – Brent Crude: DOWN 81 cents at $54.10 per barrel

New York – Dow: UP 0.1 percent at 23,346.24 (close)

London – FTSE 100: UP 0.1 percent at 6,734.23 (close)

BSS/AFP/HR/0918