17-year high for Asian technology stocks

Apple reports better-than-expected revenue and earnings per share

ASIAN technology stocks hit 17-year peaks and Wall Street’s Dow index looked set to break 22 000 points on Wall Street later, as blockbuster earnings from Apple rippled out to component makers globally.

Shares in the world’s most valuable company surged 6 percent after hours to a record of more than $159 (R2 102), taking its market capitalisation above $830 billion.

That should help carry the Dow through the 22 000 mark when trading resumes in New York. E-Mini futures for the Dow were up 0.2 percent, though Europe started flat as disappointing results from Société Générale and Commerzbank weighed on the region’s bank stocks.

Apple reported better-than-expected iPhone sales, revenue and earnings per share and said its upcoming 10th-anniversary phone is on schedule.

It helped dispel one of the few nagging doubts of the corporate earnings season so far – that Amazon’s lacklustre results last week might have revealed some tiredness among

$159 Yesterday’s price of an Apple share on Wall Street

the giant US tech and internet stocks that have been driving the stock market rally all year.

“It is all about Apple,” said Naeem Aslam, chief market analyst at Think Markets. “It topped its forecast and produced stellar numbers for its revenue and profit.”

Among Asia’s Apple suppliers, LG Innnotek jumped 10 percent and SK Hynix, the world’s second-biggest memory chip maker, rose 3.8 percent.

Murata Manufacturing firmed 4.9 percent and Taiyo Yuden 4.4 percent, helping the Nikkei up 0.47 percent.

The MSCI tech index for Asia climbed 0.9 percent to ground not trod since early 2000, bringing its gains for the year to a heady 40 percent.

Those gains balanced losses in basic materials and energy to leave MSCI’s broadest index of Asia-Pacific shares outside Japan steady near its highest since late 2007.

There was a note of caution over reports that US President Donald Trump was close to a decision on how to respond to what he considers China’s unfair trade practices.

Tepid US inflation along with political turmoil in Washington has lessened the risk of another Federal Reserve rate hike this year, lowering bond yields across the globe.

Improving data in other major economies has also served to push the greenback down nearly 11 percent from January peaks, benefiting commodities and emerging markets.

A swathe of manufacturing surveys (PMIs) out on Tuesday underlined how the improvement in activity had broadened out from the US to Asia and Europe.Alan Ruskin, head of G10 forex at Deutsche, noted the top five PMIs were all northern European economies and every index in Europe was in expansionary territory above 50 points.

“That will do nothing to hurt ebullient global risk appetite,” said Ruskin. “This phase of the risk rally is based on growth data, but even more on subdued inflation measures.

“The latter plays to a gradual central bank exit from extreme policy accommodation that should prolong the global growth cycle.”

MSCI’s gauge of stocks across the globe has scored its longest monthly winning streak in over a decade.

In currency markets, the dollar steadied above deep lows though thanks mainly to positioning – bears are already so short of the currency that they are wary of selling even more. – Reuters