Apple suppliers hit hardest as tech selloff goes global

[LONDON] Suppliers to Apple Inc have borne the brunt of the decline in tech sector stocks after a sell-off started in the US spread to Asia and Europe.

In Europe shares in AMS AG, the Swiss-listed supplier of sensors, fell as much as 9 per cent, while chipmaker STMicroelectronics NV traded as much as 8 per cent lower. The Stoxx 600 Technology index fell as much as 3.6 per cent, the biggest decline in nearly a year.

On Friday, Robert Boroujerdi, global chief investment officer at Goldman Sachs Group Inc, said that low volatility in Facebook Inc, Amazon.com Inc, Apple Inc, Microsoft Corp and Google parent Alphabet Inc may be blinding investors to risks such as cyclicality and regulation.

Apple's new iPhone is also said to be lacking the tech to match rivals' data speed, according to a Bloomberg report Friday.

"It is really the US selloff that is happening now in Europe," said Charles Lepetitpas, analyst at Natixis Securities. "I don't see any specific news." Both AMS and STMicroelectronics - the biggest tech fallers in Europe - supply chips to companies such as Apple and Samsung. AMS also flagged a weaker-than-expected dividend late Friday.

Many of the stocks being hit have been on a tear this year: AMS is the biggest riser on the Stoxx Europe 600 in that period, having more than doubled."Some investors are just taking profit," said Karsten Iltgen, analyst at Bankhaus Lampe KG.

The European slump was the last leg in a global tech selloff that began Friday in the US. In Asia, Taiwanese iPhone manufacturer Hon Hai Precision Industry Co, Ltd, closed 2.9 per cent lower. It was the largest single-day decline since last November, according to data compiled by Bloomberg. Hon Hai, better known as Foxconn, said Friday its May sales declined 5.3 per cent year-on-year to NT$279.8 billion (S$12.9 billion).

Taiwan Semiconductor Manufacturing Co, the sole maker of Apple's A11 chipsets to be used in the upcoming iPhone series, declined as much as 2.4 per cent, the biggest drop in more than six months. Samsung Electronics Co fell 1.6 per cent, while Tencent Holdings Co Ltd fell 2.2 per cent.

"Weakening smartphone demands outlook in China contributed to the slump," said Steven Liu, executive director of China Securities International Financial Holding based in Hong Kong.

BLOOMBERG