Asia markets rebound from early losses, Tokyo sinks on 2019 debut

05-Jan-2019 Intellasia | AFP | 6:00 AM Print This Post

Most Asian markets rose Friday, reversing early losses, though Tokyo tanked more than two percent 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 weekalong with weak Chinese dataafter 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 Wednesdaywiping $75 billion off its valuein 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 supplier Kyocera fell 1.8 percent, Japan Display was 2.8 percent off and Sharp dived 4.3 percent, while Alps Alpine shed 6.2 percent. Sony was 2.7 percent lower.

There were also 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, which was returning from a four-day break, ended 2.3 percent down, while Sydney shed 0.3 percent and Taipei lost more than one percent.

However, Shanghai and Hong Kong each finished more than two percent higher.

– China, US eye talks –

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 Friday 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 progressand the absence of new threats from Trumpwhile the two sides work to ease trade tensions.

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 in 2018.

Among other markets Seoul rose 0.8 percent, Singapore added 1.3 percent and Manila jumped 1.5 percent.

There were also losses in Wellington, Mumbai, Bangkok and Jakarta.

In early European trade London rose one percent, Paris gained 1.1 percent and Frankfurt was 0.8 percent higher.

Wall Street provided a negative lead as 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.

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 there is 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 well down against the Australian dollar, a day after hitting a 10-year high.

– Key figures around 0820 GMT –

TokyoNikkei 225: DOWN 2.3 percent at 19,561.96 (close)

Hong KongHang Seng: UP 2.2 percent at 25,626.03 (close)

ShanghaiComposite: UP 2.1 percent at 2,514.87 (close)

LondonFTSE 100: UP 1.0 percent at 6,761.76

Dollar/yen: UP at 108.19 yen from 107.63 yen at 2200 GMT

euro/dollar: UP at $1.1400 from $1.1394

Pound/dollar: DOWN at $1.2635 from $1.2637

OilWest Texas Intermediate: UP 50 cents at $47.59 per barrel

OilBrent Crude: DOWN 51 cents at $56.46 per barrel

New YorkDow: DOWN 2.8 percent at 22,686.22 (close)–finance.html


Category: FinanceAsia

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