Apple leads global tech stock market fall
NISSAN, RENAULT STOCKS HIT ON CHAIRMAN GHOSN’S ARREST
US stocks opened sharply lower yesterday as poor forecasts from retailers for the holiday quarter fed into a market driven lower this week by concerns about demand for iPhones.
The Dow Jones Industrial Average fell 398.76 points, or 1.59 per cent, at the open to 24,618.68.
The S&P 500 opened lower by 36.13 points, or 1.34 per cent, at 2,654.60. The Nasdaq Composite dropped 161.05 points, or 2.29 per cent, to 6,867.43 at the opening bell.
The dollar sagged on concern about the US economy after home-builder sentiment weakened and oil prices fell half a per cent despite Organisation of Petroleum Exporting Countries (Opec) production cuts.
News around Apple Inc triggered the latest bout of stock market selling, after the Wall Street Journal reported Apple was cutting production for its new iPhones.
The European tech sector sank 2.2 per cent, hitting its lowest level since February 2017, following Asian tech stocks lower. Shares of companies supplying chips to Apple suffered.
Most of Europe had a red session yesterday and that has been compounded by the news on Apple and tech stocks overnight, The overall climate is risk-off.” Philip Shaw | Investec economist
The sell-off was compounded by an auto sector drop led by Nissan and Renault after Ghosn, chairman of both carmakers, was arrested in Japan for alleged financial misconduct.
The broad European STOXX 600 index was down 0.5 per cent to a four-week low, and futures trading suggested another tough session was likely in the United States, with Nasdaq Futures down over 1 per cent. “Most of Europe had a red session yesterday and that was compounded by the news on Apple and tech stocks overnight, The overall climate is risk-off,” said Investec economist Philip Shaw.
“Beyond stocks, the Italian bonds spread [over German bonds] is at its widest in about a month now, and Brexit continues to rumble on — uncertainty is very much hurting risk sentiment,” he said.
Italian government bond yields jumped to a one-month high yesterday and Italian banking stocks dropped to a two-year low, hurt by risk aversion and concerns over the Italian budget.
Eurozone money markets no longer fully price in a 10-basis-point rate rise by the European Central Bank in 2019, indicating growing concern about the economic outlook in the region.
Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.2 per cent, with Samsung Electronics falling 2 per cent. In Japan, Sony Corp shed 3.1 per cent.
Japan’s Nikkei slipped 1.1 per cent, with shares of Nissan Motor Co tumbling more than 5 per cent after Ghosn’s arrest and reports he would be fired from the board this week.
Global stock markets have suffered a shakeout in the past two months, pressured by worries of a peak in corporate earnings growth.