SHANGHAI, Jan 3 — US stock futures fell today after a rare revenue warning from Apple Inc added to worries about slowing global growth, but a move by China’s central bank to help struggling smaller firms lifted shares there, cushioning losses for Asian markets.
The Cupertino, California-based tech giant blamed fewer iPhone upgrades and slowing sales in China in warning about revenues in its most recent quarter, its first such warning since 2007. Its shares tumbled 8 per cent in after-hours trade.
The news also sparked a “flash crash” in holiday-thinned currency markets as investors rushed to less risky assets, with the Japanese yen soaring against most major currencies in a matter of seconds.
MSCI’s broadest gauge of Asia-Pacific shares outside Japan dipped in early trade but later steadied as Chinese shares climbed. Japanese markets were closed for holidays but Nikkei futures dropped 1.8 per cent.
China’s blue-chip CSI300 index was 0.8 per cent higher, and Hong Kong’s Hang Seng gained 0.4 per cent after a bruising Wednesday session.
China’s central bank said late yesterday it was adjusting policy to benefit more small firms which are having trouble obtaining financing, in its latest move to support the cooling economy.
The step “is aimed at getting banks of all sizes to lend to SMEs through offering incentives, and is part of the government’s pledge to support private investment,” analysts at Everbright Sun Hung Kai said in a note.
“Chinese authorities have got the luxury of having control not just of the fiscal parts of the government’s tool case, but also the monetary parts of the government’s tool case,” said Jim McCafferty, head of equity research, Asia ex-Japan at Nomura.
“What’s going on right now between the US and China, a lot of this is not just about trade, a lot of it is about soft power. And the stock market is an instrument of soft power, and if the Chinese authorities are able to to influence the value of the stock market, they will do whatever it takes to make sure that that happens,” he said.
More growth boosting measures are widely expected in China amid expectations the economy will continue to slow in early 2019. Weak China December factory readings this week have spurred a fresh round of selling in global markets.
Apple’s surprise announcement weighed on tech shares across Asia, most notably in Taiwan and South Korea.
Australian shares bounced 1.4 per cent after the previous day’s drubbing, helping to offset weakness elsewhere in the region. A weaker Aussie dollar, which fell to near decade lows, also boosted exporters.
The mixed performance in Asia comes after shares on Wall Street slid in early trade yesterday on growth worries but later clawed back losses, with a surge in oil prices driving gains in energy shares.
US stock futures were still pointing lower today, with Nasdaq E-mini futures down 1.9 per cent and S&P 500 E-mini futures off 1.1 per cent following Apple’s warning.
Apple specifically highlighted slowing Chinese growth and Sino-US trade tensions, exacerbating investors’ concerns about the state of the global economy.
“The fall in the EM manufacturing PMI last month was fairly broad-based and supports our view that growth in the emerging world as a whole will slow this year,” Gabriella Dickens, an economist at Capital Economics, said in a note.
News out of Washington yesterday added to the grim mood, as a meeting between President Donald Trump and US congressional leaders produced no agreement to end a partial government shutdown.
Currency markets saw a wild spike in volatility in early Asian trade, with risk aversion pushing the yen sharply higher against the US dollar, breaking key technical levels and triggering stop-loss sales of US and Australian dollars.
US crude dipped 1.38 per cent at US$45.90 a barrel (RM189.62) after a sharp rise yesterday. Brent crude was down 0.5 per cent at US$54.62 per barrel.
Source: The Malay Mail Online