Tech firms big losers as most Asian markets sink
Hong Kong (AFP)
Technology firms took a hit in Asia on Tuesday as two of the biggest names in the sector posted disappointing earnings, helping to drag most markets in the region into negative territory.
A below-forecast reading on Chinese factory activity added to the downbeat mood, though a weak US inflation print reinforced expectations the Federal Reserve will keep well away from lifting interest rates any time soon.
While corporate results have broadly beaten expectations so far, nagging concerns about the outlook for the global economy are keeping investors on edge, preventing them from extending what has been a stellar start to the year for equities.
There were losses across asset classes, with energy firms hit by ongoing weakness in oil prices, which are well down from the six-month highs touched last week.
But the tech sector was among the worst hit after Google parent Alphabet reported a 29-percent drop in quarterly earnings on slower-than-expected revenue growth. The reading sent its shares plunging more than seven percent in New York after-hours trade.
That was followed Tuesday morning by smartphone and chip titan Samsung Electronics saying that operating profit dived a worst-than-expected 60.2 percent in January-March as sales also tumbled.
The firm's shares sank one percent, while in Hong Kong heavyweight Tencent shed a little more than that and ZTE collapsed three percent. Taipei-listed Foxconn and LG Display in Seoul also tumbled.
- Trade talks back in view -
The release of Apple's results later in the day will be nervously watched by the market with some observers suggesting a weak reading could spark more heavy selling.
Regional stock markets were mostly in the red with Hong Kong losing 0.8 percent, Seoul down one percent, Sydney off 0.6 percent, Singapore losing 0.5 percent and Taipei 0.1 percent off.
However, Shanghai rose 0.3 percent after three days of heavy losses, while Wellington and Manila also gained slightly.
Bargain buying in China helped offset data showing activity in the country's factories barely grew last month, indicating the world's number two economy continues to struggle.
Eyes turn to Beijing this week with top negotiators preparing for another round of talks to end their debilitating trade row, with expectations a deal will eventually be done.
OANDA senior market analyst Edward Moya said the agreement could be signed off by Donald Trump and Xi Jinping as early as next month if Treasury Secretary Mnuchin and US Trade Representative Lighthizer flag progress on a number of issues including intellectual property and forced technology transfer.
Mnuchin said there was "a strong desire from both sides to see if we can wrap this up or move on", adding he was hopeful for something to report after the next two rounds of meetings.
Also in the pipeline this week is the Fed's latest policy meeting, with hopes for some forward guidance on its rates plans. A below-par inflation reading Monday makes it unlikely the bank will hike before the end of the year.
- Key figures around 0300 GMT -
Hong Kong - Hang Seng: DOWN 0.8 percent at 29,652.00
Shanghai - Composite: UP 0.3 percent at 3,071.75
Tokyo - Nikkei 225: closed for holiday
Euro/dollar: UP at $1.1188 from $1.1185 at 2100 GMT
Pound/dollar: UP at $1.2941 from $1.2932
Dollar/yen: DOWN at 111.60 yen from 111.64 yen
Oil - West Texas Intermediate: DOWN 14 cents at $63.36 per barrel
Oil - Brent Crude: DOWN 29 cents at $71.75 per barrel
New York - Dow: UP less than 0.1 percent at 26,554.39 (close)
London - FTSE 100: UP 0.2 percent at 7,440.66 (close)
© 2019 AFP