Asia market trends Thursday: Apple slashes guidance on China slowdown

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Despite Wall Street’s recovery from early losses in Wednesday trade, Asian shares appear set to start Thursday in the red after Apple slashed its guidance, with the company pointing in part to the U.S. trade war and an economic slowdown across Greater China.

Apple slashed its guidance for the quarter ended 29 December, lowering its revenue projection to US$84 billion. That compared with Refinitiv forecasts for US$91.5 billion, and off its original estimate for US$89 billion to US$93 billion, Reuters reported.

In a letter from Apple CEO Tim Cook to investors, he pointed in part to an economic deceleration in Greater China, with the mainland economy starting to slow in last year’s second half and to the effects of rising trade tensions with the U.S.

“As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well, with traffic to our retail stores and our channel partners in China declining as the quarter progressed,” he wrote.

“Lower than anticipated iPhone revenue, primarily in Greater China, accounts for all of our revenue shortfall to our guidance and for much more than our entire year-over-year revenue decline,” Cook said.

Apple shares dropped 7.51 percent by 7:35 A.M. SGT in after-hours trade.

Indexes

March futures for Japan’s Nikkei 225 index were down 440 points at 19,415 at 7:25 A.M. SGT, according to CME data; that compares with the index’s close at 20,014.77 on Friday. The Tokyo Stock Exchange was closed on Wednesday and will be closed on Thursday.

Singapore’s Straits Times Index ended down 0.97 percent at 3038.89 on Wednesday; January futures for the index were at 3040 on Wednesday, while February and March futures were at 3042 and 3039 respectively.

Hong Kong’s Hang Seng Index tumbled 2.77 percent to 25,130.35 on Wednesday, while China’s CSI 300 index shed 1.37 percent to 2969.535.

Malaysia’s KLCI index was down 1.33 percent at 1668.11 on Wednesday, while Indonesia’s IDX Composite shed 0.22 percent to 6181.18.

South Korea’s Kospi ended Wednesday down 1.52 percent at 2010.00.

The Dow Jones Industrial Average edged up 0.08 percent to 23,346.24 at Wednesday’s close, the Nasdaq Composite added 0.49 percent to 6360.87 and the S&P 500 was up 0.13 percent at 2510.03. Futures for the three indexes were sharply lower in early trade.

The e-mini Dow futures for March were down 294 points at 23,031 at 7:25 A.M. SGT, according to CME data.

Oil

Nymex WTI crude oil futures for February were down 1.07 percent at US$46.04 a barrel at 7:11 A.M. SGT, while ICE Brent crude futures for March were up 2.06 percent at US$54.91 a barrel at 6:59 A.M. SGT, according to Bloomberg data.

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