Asia: Markets tumble as tech, energy firms take a battering

[HONG KONG] Technology firms led a plunge in Asian markets on Tuesday, tracking a deep sell-off in New York where Apple tumbled on worries about demand for its iPhones, while energy firms were also in free-fall with oil prices.

After last week's US elections-inspired mini-rally, global equities resumed their months-long slide as investors fret over a number of issues from the China-US trade war and Brexit to rising US interest rates and slowing economic growth.

The latest bloodbath comes after a key parts supplier said a client - widely thought to be Apple - had slashed orders, stoking speculation that the US titan's popular handset was not selling as well as in the past.

Apple was already under pressure after posting disappointing earnings earlier this month and announcing it would no longer report iPhone sale numbers. The firm sank five percent Monday and is almost 17 per cent down from its record high touched at the start of October.

The retreat in New York's tech firms was repeated in Asia, with Apple suppliers and other firms in the sector taking a severe hit.

In Tokyo, Japan Display and Alps Electronics both sank more than seven percent, while Sony was off almost five percent. Taipei-listed Foxconn was 1.7 per cent off and Taiwan Semiconductor dived 2.2 per cent.

Samsung shed 2.9 per cent in Seoul, AAC Technologies retreated more than six per cent in Hong Kong, while Tencent was 3.7 per cent lower.

The view on broader stock markets was only slightly less startling. Tokyo dropped 3.2 per cent by the break, Hong Kong 1.9 per cent and Shanghai 0.5 per cent.

Sydney, Seoul and Taipei were each 1.7 per cent lower, while Singapore, Wellington and Manila were all around one per cent off.

'WALL OF WORRY'

Adding to the downward pressure was another plunge in oil prices, which skittled energy firms.

Crude has been torpedoed since hitting four-year highs last month as dealers fret about oversupply, weakening demand and worries about the impact of the China-US trade war.

Signs of a softer-than-expected impact from US sanctions on Iranian crude exports also weighed on prices.

The commodity enjoyed a healthy rise early Monday after Saudi Arabia called for a global output cut of one million barrels per day and unveiled plans to trim its own production by 500,000 barrels from December.

However, Donald Trump later hit out at the announcement in a tweet calling for prices to go lower.

"Hopefully, Saudi Arabia and Opec will not be cutting oil production. Oil prices should be much lower based on supply!" he wrote.

Both main contracts were down more than one percent in Asia. And energy firms plunged across the board, with CNOOC off more than four per cent in Hong Kong and Inpex a similar amount down in Tokyo while Woodside Petroleum lost 2.4 per cent in Sydney.

The dollar was also up against most other high-yielding and emerging market currencies as investors seek out safe bets to protect them against risk, though it dipped against its major peers.

David Kudla, chief executive officer of Mainstay Capital Management, said investors were facing a number of issues that were depressing stock markets.

"We always talk about that proverbial wall of worry and that wall right now is pretty high," he told Bloomberg TV.

"We have the issues in China with the growth concerns there, we have the issues in Europe with the battle between Italy and the EU, the UK getting ready for Brexit. There is some guidance lower on earnings, and a Federal Reserve that is going to raise rates."

AFP