Asia report: Apple suppliers lead regional sell-off

Markets in Asia were weaker across the region on Friday, with suppliers to US technology giant Apple among the leading losers, as investors continued to monitor developments in the ongoing Covid-19 coronavirus pandemic.

In Japan, the Nikkei 225 was down 1.52% at 22,977.13, as the yen strengthened 0.19% against the dollar to last trade at JPY 104.41.

Automation specialist Fanuc managed gains of 3.21%, while among the benchmark’s other major components, fashion firm Fast Retailing was down 0.56% and technology conglomerate SoftBank Group lost 1.65%.

Apple suppliers in Japan were on the back foot, after the California-based consumer technology firm beat expectations in its fourth quarter earnings overnight, but left traders in the dark as to its outlook as it did not provide any guidance for the next three months.

Murata Manufacturing was down 2.91% and Taiyo Yuden was off 1.92%.

The broader Topix index lost 1.96% by the end of trading in Tokyo, closing at 1,579.33.

Fresh economic data out of Japan showed the country’s industrial output improved 4% month-on-month in September, on a preliminary basis.

On the mainland, the Shanghai Composite slipped 1.47% to 3,224.53, and the smaller, technology-heavy Shenzhen Composite was 2.29% lower at 2,198.07.

South Korea’s Kospi was off 2.56% at 2,267.15, while the Hang Seng Index in Hong Kong slid 1.95% to 24,107.42.

The blue-chip technology stocks were both weaker in Seoul, with Samsung Electronics down 2.58% and SK Hynix off 2.2%.

Korea-based Apple supplier LG Display was 2.77% weaker, while in Hong Kong, AAC Technologies was off 2.47%.

“Tech stocks in Asia … rolled over after Apple sales of iPhones fell short in their fourth quarter numbers,” said CMC Markets chief market analyst Michael Hewson.

“Again, this shouldn’t be a surprise when everyone knows that Apple has a new iPhone model coming out in the upcoming quarter.

“Who wants to buy a new iPhone that will be quickly replaced by a newer model in a matter of weeks?”

The increasing number of coronavirus cases in the US and Europe was at the fore of traders’ minds once again, although there was a glimmer of positive sentiment, as Moderna Therapeutics announced overnight that it was preparing for the global launch of its vaccine, which is currently being tested.

Oil prices were lower as the region entered the weekend, with Brent crude last down 0.35% at $37.52 per barrel, and West Texas Intermediate losing 0.55% to $35.97.

In Australia, the S&P/ASX 200 was 0.55% weaker at 5,927.60, although financial services giant AMP rocketed 19.53% after it received a conditional takeover offer from Ares Management.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was on the back foot by 0.96% at 12,084.47.

Cannabis stocks took a hit in Wellington, after preliminary results for a recent referendum on recreational use of the drug showed a majority of the electorate supporting its current illegal status - although a large number of special votes are still to be counted.

Cannasouth was down 16.67%, and Rua Bioscience was 2.94% weaker.

The down under dollars were marginally stronger on the greenback, with the Aussie last ahead 0.09% at AUD 1.4216, and the Kiwi advancing 0.05% to NZD 1.5079.