You are here
Asia: Markets slip after Wall Street losses
[HONG KONG] Asian markets retreated Wednesday following a negative lead from Wall Street, while Japanese shares were dragged by a stronger yen.
The euro held on to most of its gains after a recent sell-off, with Greek lawmakers due to vote later in the day on another round of reforms aimed at getting access to much-needed bailout cash.
Tech firms linked to Apple retreated after the world's biggest company's latest earnings report left investors disappointed.
Tokyo lost 1.23 per cent after coming within a whisker Tuesday of a fresh 18-year high, while Hong Kong lost 0.89 per cent, Shanghai eased 0.18 per cent, Sydney shed 1.00 per cent and Seoul was down 0.85 per cent.
After a broadly healthy set of gains in recent sessions, investors took a step back after losses in New York that come in response to weak quarterly reports from tech giants Microsoft and United Technologies. The figures raised concerns about the upcoming US earnings season.
The Dow sank 1.00 per cent, the S&P 500 dropped 0.43 per cent and the Nasdaq lost 0.21 per cent, snapping a streak of three straight record highs.
And in after-hours US trade Apple tumbled about eight percent as it released a report showing net profit leapt almost 40 per cent in April-June but iPhone sales were weaker than expected and sales forecasts also fell short.
Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors in Sydney, told Bloomberg News: "The earnings season in the US is going to be quite weak. Investors are expecting too much from Apple and that's already reflected in the share price."
Asian suppliers to Apple retreated. Hon Hai Precision slipped 0.80 per cent in Taipei, while Pegatron slipped 2.40 per cent. In Tokyo Japan Display sank more than four percent and Seoul-listed Samsung Electronics fell 1.34 per cent.
The dollar slipped on profit-taking after a recent rally, although the weakness is not expected to last as the Federal Reserve holds its next policy meeting on July 29, with traders looking for clues about its timetable for lifting interest rates.
Analysts have forecast a rise in either September or December after Fed chief Janet Yellen said this month she saw a move by the end of the year.
The dollar was at 123.64 yen in Tokyo Wednesday, slightly up from 123.86 yen in New York, but lower than 124.35 yen in Tokyo earlier Tuesday.
The euro fetched US$1.0956 and 135.45 yen, against US$1.0942 and 135.53 yen in US trade but well up from US$1.0825 and 134.61 yen Tuesday in Asia.
The single currency was given some buoyancy by the progress in Greece on securing a fresh bailout.
On Tuesday the Greek government submitted to parliament a second batch of reform measures needed to start negotiations on a new deal with its creditors, with a vote scheduled for Wednesday.
"The euro is higher as progress continues to be made toward a third financial assistance programme for Greece," said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities.
On oil markets US benchmark West Texas Intermediate for delivery in September, a new contract, fell 52 cents to US$50.34 and Brent crude for September declined 41 cents to US$56.63.
And gold remains under pressure at five-year lows as the Fed edges closer to its rate rise, which has seen investors pile into the dollar and out of the precious metal looking for better returns.
Bullion fetched US$1,096.75 an ounce compared with US$1,108.55 late Tuesday.