Asia: Stocks weighed down by Apple, oil slide as Aussie climbs

[SYDNEY] Most Asian shares dropped and US equity index futures fell after Apple Inc, the world's largest company, disappointed investors with its first annual sales decline since 2001. Crude oil slid to a three-week low and Australia's dollar strengthened.

More than three shares retreated for every one that advanced on the MSCI Asia Pacific Index, with energy companies leading losses. Apple fell as much as 2.9 per cent in after-hours US trading, dragging Nasdaq index futures 0.3 per cent lower.

Crude sank for a third day on speculation Russia won't join planned output cuts being orchestrated by Opec. The Aussie rose by the most in a week and Australian bonds pared gains after a pickup in inflation reduced prospects of an interest-rate cut.

"Apple's forward expectations aren't great and it's susceptible to more of a pullback," said James Audiss, Sydney-based senior wealth manager at Shaw and Partners Ltd, which oversees about US$7.5 billion.

"Now plenty of countries want an exemption to the Opec output cuts and that's putting pressure on oil."

Sliding prices for Apple smartphones and a forecast for lower-than-expected profitability over the holiday period cast a cloud over an earnings season that's been generally positive, with about three-quarters of the S&P 500 Index companies to have reported so far beating estimates.

Bank of China Ltd, Nintendo Co and Posco are among Asian companies reporting results Wednesday. Outside of the region, the lineup includes Tesla Motors Inc, Coca-Cola Co, Bayer AG and GlaxoSmithKline Plc.

Global markets have seen declines in volatility, with a cross-asset gauge of price swings in equities, rates, currency and commodities down to the lowest since 2014. That's coincided with a reduction in uncertainty when it comes to US politics and policy.

Hillary Clinton's odds of victory in next month's presidential election are close to the highest on record at 86.5 per cent, according to forecaster FiveThirtyEight. Likewise, investors appear to be coming to terms with the inevitability of a Federal Reserve interest-rate hike by December, with futures trading signalling the likelihood is about 73 per cent.

Stocks

Australia's S&P/ASX 200 Index slid 1.4 per cent to a one-month low as of 9:57am Tokyo time, while South Korea's Kospi index fell by the most in two weeks.

Japan's Topix index slipped 0.2 per cent from its highest close since May and futures on Hong Kong's Hang Seng Index declined 0.5 per cent.

Wesfarmers Ltd, Australia's largest retail chain, lost 5 per cent in Sydney after sales at its Coles supermarkets missed estimates. Australian banks also lost ground ahead of results on Thursday from National Australia Bank Ltd, with Goldman Sachs Group Inc saying it will be a "tough" earnings season for the nation's biggest lenders and Citigroup Inc forecasting NAB and Westpac Corp will cut dividends.

S&P 500 futures declined 0.2 per cent after the underlying gauge closed 0.4 per cent lower on Tuesday. Nasdaq 100 Index contracts lost 0.3 per cent.

Currencies

The Aussie strengthened 0.6 per cent versus the greenback. Consumer prices increased 1.3 per cent from a year earlier in the last quarter, exceeding the previous period's one per cent gain and the 1.1 per cent rise forecast in a Bloomberg survey.

"A jump in headline inflation will help calm RBA fears over inflation expectations and thus means a steady hand on rates into year end," said Sean Callow, a senior strategist at Westpac Banking Corp in Sydney.

The won strengthened 0.2 per cent versus the US dollar and the yen gained 0.1 per cent. The Bloomberg Dollar Spot Index was little changed, after retreating 0.1 per cent from a seven-month high on Tuesday.

Commodities

Crude oil slid 1.2 per cent to US$49.34 a barrel in New York. Output cuts are not an option for Russia, the nation's envoy to the Organization of Petroleum Exporting Countries said, according to Interfax. American supplies rose by 4.75 million barrels last week, industry data showed ahead of Wednesday's release of official figures.

BLOOMBERG