HONG KONG (AFP) – Most Asian markets rose yesterday, reversing early losses, though Tokyo tanked more than two per cent while technology firms were hit further by Apple’s shock revenue warning.
The broad gains helped end a torrid week on a positive note but traders remain on edge as they face a confluence of issues including the China-US trade war, China’s stuttering economy, the US government shutdown and Brexit.
Apple has been a major 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 per cent Wednesday – wiping USD75 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 on Friday. In Tokyo supplier Kyocera fell 1.8 per cent, Japan Display was 2.8 per cent off and Sharp dived 4.3 per cent, while Alps Alpine shed 6.2 per cent.
Sony was 2.7 per cent lower. There were also hefty losses for AAC Technologies in Hong Kong and Foxconn in Taipei, which had already been badly hit on Thursday.
“Belief in global corporate earnings is fading against the backdrop of the US-China trade friction,” Head of Investment Information at Mizuho Securities in Tokyo Nobuhiko Kuramochi 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, which was returning from a four-day break, ended 2.3 per cent down, while Sydney shed 0.3 per cent and Taipei lost more than one per cent.
However, Shanghai finished more than two per cent higher while Hong Kong was 1.8 per cent up in late trade.
Investors will be keeping tabs on developments in the China-US trade standoff with the two sides facing a March 1 deadline to hammer out a deal before Washington jacks up tariffs on a slew of Chinese goods.
Beijing said yesterday a US delegation would visit China at the start of next week for the first face-to-face talks since President 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, investors are sceptical 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.
Among other markets Seoul rose 0.8 per cent, Singapore added 1.2 per cent and Manila jumped 1.5 per cent.
There were also losses in Wellington, Mumbai, Bangkok and Jakarta.
Wall Street provided a negative lead as the tech-rich Nasdaq lost three per cent and the Dow 2.8 per cent, with the US government shutdown showing no sign of ending while investors were also jolted by weak manufacturing data.
Attention is now 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.
The dollar edged back against the yen after Thursday’s flash crash, but analysts expect further gains for the Japanese unit while talk of intervention by authorities to keep it from strengthening too much and hurting exporters.
The day’s more positive mood saw the greenback sold across the board against high-yielding and emerging market units including the South Korean won, South African rand, Russian ruble and Indonesian rupiah.
It was also down against the Australian dollar, a day after hitting a 10-year high.