Asia markets down ahead of Fed, Apple earnings hit suppliers
Apple’s suppliers were among the big losers in Asian markets Wednesday after it announced the first fall in iPhone sales, while overall trading was tentative before a Federal Reserve announcement later in the day.
READ: Apple reports iPhone sales down, 1st revenue drop since 2003
US tech giant Apple said Tuesday that waning demand for its popular handset led to the first dip in revenue since 2003, and the trend was likely to continue this year as a growth slowdown in China drags on that crucial market.
The news pummelled Apple’s shares in after-hours US trading, with the firm plummeting more than eight percent.
Apple’s results were “pretty disappointing”, said Angus Nicholson, a Melbourne-based market analyst at IG.
It also hit Asian companies that provide parts for Apple gadgets. In Tokyo Japan Display was 0.5 percent down, Alps Electric shed more than one percent and Taiyo Yuden slid 0.8 percent.
“The sales drop forecast by Apple for the April-June period is greater than expected,” Nobuyuki Fujimoto, a senior market analyst at SBI Securities, told Bloomberg News.
“The shares of Japanese electronic-component makers are down by association.”
Taipei-listed Hon Hai Precision — parent of assembler Foxconn, which builds the iPhone and iPad — shed 0.9 percent and South Korea’s LG Display lost almost four percent.
Regional stock markets were in the red before the Fed ends its two-day meeting on Wednesday, with dealers hoping for some guidance on its plans for monetary policy even though no major decisions are expected.
Hong Kong ended 0.2 percent down and Seoul gave up 0.2 percent.
Shanghai ended 0.4 percent lower, with early gains wiped out by a reading on Chinese industrial firms’ profits for March that lowered the chances authorities will add to their stimulus programme.
Wellington, Singapore and Taipei were also well down.
In early European trade London dipped 0.2 percent while Frankfurt was flat. Paris sank 0.3 percent.
Sydney shed 0.6 percent, reversing a morning rally.
Tokyo’s Nikkei ended down 0.4 percent a day before Japan’s central bank completes its own policy meeting, which is forecast to see a boost to its stimulus package after deadly earthquakes that led to the closure of several factories in the south.
“Speculation is pretty high that we’re going to see some sort of announcement of further easing from the BoJ,” Angus Nicholson, a market analyst at IG in Melbourne, told Bloomberg News.
On oil markets prices for both main contracts rallied more than 1.5 percent, building on Tuesday’s strong gains that came on the back of speculation Saudi Arabia plans to cut back drilling and forecasts of a drop in US stockpiles. TVJ
