HONG KONG, Jan 4, 2019 (BSS/AFP) – There was no respite for Asian
investors Friday as most regional markets suffered more losses, with Tokyo
tanking three percent and technology firms taking another hiding after
Apple’s shock revenue warning.
The new year has proved so far to be anything but happy on trading floors
as dealers face a confluence of issues including the China-US trade war,
China’s stuttering economy, the US government shutdown and Brexit.
Apple has been the source of angst this week after it slashed its revenue
forecasts blaming weak Chinese demand for its iPhones and citing the tariffs
spat between Washington and Beijing.
The US tech titan plunged 10 percent Wednesday — wiping $75 billion off
its value — in response to the announcement and analysts said the fact such
a usually safe firm was feeling the pinch was a sign of deeper problems in
the global economy.
Technology firms, particularly those linked to Apple, were among the worst
hit in Asia Friday. In Tokyo, which was returning from a four-day break,
supplier Kyocera fell 3.3 percent, Japan Display was 1.4 percent off and
Sharp dived 4.2 percent, while Alps Alpine shed 5.8 percent.
Sony was also more than four percent lower. There were also hefty losses
for AAC technologies in Hong Kong and Foxconn in Taipei, which had already
been badly hit Thursday.
“Belief in global corporate earnings is fading against the backdrop of the
US-China trade friction,” Nobuhiko Kuramochi, head of investment information
at Mizuho Securities in Tokyo, told Bloomberg News.
“Deteriorating Apple earnings will lead to volume cuts for suppliers…
while it could also mean cost-cutting pressures.”
Tokyo’s Nikkei 225 index ended the morning down 3.0 percent.
Shanghai shed 0.2 percent and Sydney was one percent lower while Seoul
dropped 0.1 percent and Taipei sank 1.3 percent. There were also losses in
Wellington and Jakarta. However, Hong Kong added 0.1 percent and Singapore
edged up 0.3 percent.
– China, US eye talks –
The losses follow sharp falls on Wall Street where the tech-rich Nasdaq
lost three percent and the Dow 2.8 percent, with the US government shutdown
showing no sign of ending while investors were also jolted by weak
manufacturing data.
Investors will be keeping tabs on developments in the China-US trade
standoff with the two sides less than two months short of a deadline to
hammer out a deal before Washington jacks up tariffs on a slew of Chinese
goods.
Beijing said Friday that a US delegation would visit China at the start of
next week for the first face-to-face talks since Donald Trump and his Chinese
counterpart Xi Jinping agreed a ceasefire.
Word of the meeting follows small signs of progress — and the absence of
new threats from Trump — while the two sides work to ease trade tensions by
March 1.
However, there remains little hope the world’s top two economies will be
able to bring an end any time soon to their debilitating spat, which hammered
global markets for most of 2018.
Most immediately, attention is on the release later in the day of key US
jobs data for December, which will give another snapshot of the economy, with
a strong reading likely to put pressure on the Federal Reserve to press on
with its interest rate hikes.
The prospect of borrowing costs getting more expensive was another factor
helping drive down equities last year.
On currency markets the dollar edged back against the yen after Thursday’s
flash crash, but the greenback was down against most other high-yielding and
emerging market units including the South Korean won, South African rand and
Indonesian rupiah.
It was also down against the Australian dollar, a day after hitting a 10-
year high.
– Key figures around 0230 GMT –
Tokyo – Nikkei 225: DOWN 3.0 percent at 19,407.40 (break)
Hong Kong – Hang Seng: UP 0.1 percent at 25,093.68
Shanghai – Composite: DOWN 0.2 percent at 2,460.73
Dollar/yen: UP at 107.85 yen from 107.63 yen at 2200 GMT
Euro/dollar: UP at $1.1406 from $1.1394
Pound/dollar: UP at $1.2643 from $1.2637
Oil – West Texas Intermediate: DOWN 32 cents at $46.77 per barrel
Oil – Brent Crude: DOWN 50 cents at $55.45 per barrel
New York – Dow: DOWN 2.8 percent at 22,686.22 (close)
London – FTSE 100: DOWN 0.6 percent at 6,692.66 (close)