While worries about the Syrian crisis and a potential China-US trade war keep dealers on edge, focus has for now moved to the corporate arena as the earnings season gets into full swing.
All three main Wall Street indexes fell Thursday after a mixed bag of business reports with market giant Procter & Gamble posting lacklustre results, while rising US Treasury yields also spooked investors worried about higher interest rates.
But the big news was a near-three percent plunge in Apple, which came after major chip supplier Taiwan Semiconductor Manufacturing Co. (TSMC) forecast sales for the present quarter would be about $1 billion down on analyst forecasts.
This fuelled concerns that the smartphone sector, a massive driver of revenue for tech firms, including Apple and Samsung, was beginning to wane. The tech-rich Nasdaq lost 0.8 percent in New York.
Asia-listed Apple suppliers and other tech firms fell. In Taipei, TSMC plunged almost six percent and Foxconn lost one percent. Alps Technology shed 1.6 percent in Tokyo, while Seoul-listed LG Display was off 0.6 percent.
South Korean titan Samsung was more than one percent lower, while AAC Technologies sank 5.5 percent in Hong Kong.
Pound extends losses
On broader markets, Taipei was off 1.4 percent, Hong Kong fell 0.2 percent and Seoul was 0.3 percent lower, while Shanghai dipped 0.7 percent. Singapore shed 0.2 percent and Sydney was 0.1 percent off.
However, Tokyo ended the morning 0.1 percent higher.
Manila jumped 1.3 percent, recovering most of Thursday’s losses, though the index is down 10 percent so far this year on worries about inflation, a weak currency and fears the central bank may need to lift interest rates sharply.
Energy firms dipped slightly after Thursday’s oil-fuelled surge after reports said OPEC officials meeting in Saudi Arabia suggested supplies looked like they were coming into line with demand. That led to worries about an OPEC-Russia output cap deal that has supported prices in recent years.
However, crude remains at more than three-year highs, supported by continued Middle East tensions and signed of healthy US demand.
On currency markets, the pound continued its fall against the dollar after Bank of England boss Mark Carney tempered expectations of an interest rate hike next month following an surprise drop in March inflation.
Sterling had rallied at the start of the week to its highest post-Brexit vote level on bets that British prices had continued to rise last month and rates would follow suit.
“Carney walked back all the hawkishness suggesting interest rates will go up over the next few years but gave no specific timeline which caused anyone who was banking on a May rate hike to head for the exits,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
Tokyo – Nikkei 225: UP 0.1 percent at 22,222.13 (break)
Hong Kong – Hang Seng: DOWN 0.2 percent at 30,652.11
Shanghai – Composite: DOWN 0.7 percent at 3,095.11
Euro/dollar: UP at $1.2346 from $1.2344 at 2100 GMT
Dollar/yen: UP at 107.45 yen from 107.37
Pound/dollar: DOWN at $1.4077 from $1.4082
Oil – West Texas Intermediate: DOWN nine cents at $68.20 per barrel
Oil – Brent North Sea: DOWN six cents at $73.72 per barrel
New York – Dow: DOWN 0.3 percent at 24,664.89 (close)
London – FTSE 100: UP 0.2 percent at 7,328.92 (close).
Published in Daily Times, April 21st 2018.
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