Bulls And Bears

Asian bourses mostly up as focus turns to US midterms

Apple's Asian supplier and assembler stocks fell on Tuesday on a media report that the iPhone maker had told its smartphone assemblers to halt plans for additional production lines dedicated to its new iPhone XR.
Potential buyers of the iPhone XR at an Apple store in Shanghai. Companies that supply Apple have been badly hit after a Nikkei business report said the tech firm had told Taiwan's Foxconn and Pegatron to scrap planned new production lines for the iP
Potential buyers of the iPhone XR at an Apple store in Shanghai. Companies that supply Apple have been badly hit after a Nikkei business report said the tech firm had told Taiwan's Foxconn and Pegatron to scrap planned new production lines for the iPhone XR.PHOTO: AGENCE FRANCE-PRESSE

But tech firms among worst performers on the back of Apple's output worries

Asian markets mostly rose yesterday as focus turned to the US midterm elections, which could impact Mr Donald Trump's presidency, while Apple suppliers suffered on reports the tech titan had cancelled plans to ramp up output of its new iPhone.

The United States goes to the polls in the first major electoral test for Mr Trump since he took the White House and embarked on an "America First" agenda that has split opinion.

While his tax cuts and deregulation have helped fire the economy and push stock markets to multiple record highs earlier this year, there is growing concern that his long-running trade row with China is beginning to bite.

The vote has the added twist of an investigation that is looking at whether his campaign colluded with Moscow to win the 2016 election. If the Democrats win both houses of Congress, they could push harder for impeachment, fuelling uncertainty.

"These midterm elections carry a sizeable legal risk for the (Republicans) which could dent investor confidence as we will likely hear much more from (Russia probe lead counsel) Robert Mueller sooner rather than later," said Mr Stephen Innes, head of Asia-Pacific trade at Oanda.

Hong Kong edged up 0.2 per cent in the afternoon, having lost more than 2 per cent on Monday, while Tokyo was up more than 1 per cent, thanks to a weaker yen.

Sydney gained 1 per cent and Seoul added 0.6 per cent. Wellington rose 0.4 per cent and Jakarta inched up 0.1 per cent.

However, Shanghai ended down 0.2 per cent and Taipei lost 0.7 per cent.

Hopes that China and the US can resolve their tariff row were given a boost by comments from Chinese Vice-President Wang Qishan that he felt the two sides would reach an agreement.

"Both China and the US would love to see greater trade and economic cooperation," he told the Bloomberg New Economy Forum in Singapore. "The Chinese side is ready to have discussions with the US on issues of mutual concern and work for a solution on trade acceptable to both sides."

On the back of Apple's output worries, technology firms were among the worst performers. Companies that supply Apple took a hit after a report in Japan's Nikkei business daily said the tech firm had told Taiwan's Foxconn and Pegatron to scrap planned new production lines for the iPhone XR.

Pegatron fell 4.6 per cent though Foxconn bounced back to rise 0.2 per cent, while other tech companies were being sold off. Alps Electric in Tokyo sank 0.8 per cent, Samsung dropped 0.1 per cent in Seoul and AAC Technologies was almost 5 per cent lower in Hong Kong.

Seoul-listed LG Display was 0.6 per cent lower and Japan Display gave back 3.7 per cent.

Firms linked to Apple were already under pressure after the US giant last week reported weaker-than-forecast iPhone sales and said it would no longer reveal how many units it had shifted in its results.

Apple shares have fallen almost 10 per cent since Thursday.

Past the US midterms, traders are looking at the Federal Reserve's latest policy meeting, which is not expected to see another interest rate hike but will be followed for clues about its plans for future moves.

Expectations for more rises has pushed the US dollar higher against its peers, though the pound is enjoying some buying as hopes grow that officials are close to an agreement on a post-Brexit deal for Britain.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on November 07, 2018, with the headline 'Asian bourses mostly up as focus turns to US midterms'. Print Edition | Subscribe