Tech firms big losers as most Asian mar­kets sink

big losers as most Asian mar­kets sink

Mizzima Business Weekly - - EDITORIAL -

Tech­nol­ogy firms took a hit in Asia on 30 April as two of the big­gest names in the sec­tor posted dis­ap­point­ing earn­ings, help­ing to drag most mar­kets in the re­gion into neg­a­tive ter­ri­tory.

A be­low-fore­cast read­ing on Chi­nese fac­tory ac­tiv­ity added to the down­beat mood, though a weak US in­fla­tion print re­in­forced ex­pec­ta­tions the Fed­eral Re­serve will keep well away from lift­ing in­ter­est rates any time soon.

While cor­po­rate re­sults have broadly beaten ex­pec­ta­tions so far, nag­ging con­cerns about the out­look for the global econ­omy are keep­ing in­vestors on edge, pre­vent­ing them from ex­tend­ing what has been a stel­lar start to the year for eq­ui­ties.

There were losses across as­set classes, with en­ergy firms hit by on­go­ing weak­ness in oil prices, which are well down from the six-month highs touched last week.

But the tech sec­tor was among the worst hit af­ter Google par­ent Al­pha­bet re­ported a 29-per­cent drop in quar­terly earn­ings on slower-than-ex­pected rev­enue growth. The read­ing sent its shares plung­ing more than seven per­cent in New York af­ter-hours trade.

That was fol­lowed Tues­day morn­ing by smart­phone and chip ti­tan Sam­sung Elec­tron­ics say­ing that op­er­at­ing profit dived a worst-than-ex­pected 60.2 per­cent in Jan­uary-March as sales also tum­bled.

The firm's shares sank one per­cent, while in Hong Kong heavy­weight Ten­cent shed a lit­tle more than that and ZTE col­lapsed three per­cent. Taipei-listed Fox­conn and LG Dis­play in Seoul also tum­bled.

- Trade talks back in view -

The re­lease of Ap­ple's re­sults later in the day will be ner­vously watched by the mar­ket with some ob­servers sug­gest­ing a weak read­ing could spark more heavy sell­ing.

Re­gional stock mar­kets were mostly in the red with Hong Kong los­ing 0.8 per­cent, Seoul down one per­cent, Sydney off 0.6 per­cent, Sin­ga­pore los­ing 0.5 per­cent and Taipei 0.1 per­cent off.

How­ever, Shang­hai rose 0.3 per­cent af­ter three days of heavy losses, while Welling­ton and Manila also gained slightly.

Bar­gain buy­ing in China helped off­set data show­ing ac­tiv­ity in the coun­try's fac­to­ries barely grew last month, in­di­cat­ing the world's num­ber two econ­omy con­tin­ues to strug­gle.

Eyes turn to Bei­jing this week with top ne­go­tia­tors pre­par­ing for another round of talks to end their de­bil­i­tat­ing trade row, with ex­pec­ta­tions a deal will even­tu­ally be done.

OANDA se­nior mar­ket an­a­lyst Ed­ward Moya said the agree­ment could be signed off by Don­ald Trump and Xi Jin­ping as early as next month if Trea­sury Sec­re­tary Mnuchin and US Trade Rep­re­sen­ta­tive Lighthizer flag progress on a num­ber of is­sues in­clud­ing in­tel­lec­tual prop­erty and forced tech­nol­ogy trans­fer.

Mnuchin said there was "a strong de­sire from both sides to see if we can wrap this up or move on", adding he was hope­ful for some­thing to re­port af­ter the next two rounds of meet­ings.

Also in the pipe­line this week is the Fed's lat­est pol­icy meet­ing, with hopes for some for­ward guid­ance on its rates plans. A be­low-par in­fla­tion read­ing Monday makes it un­likely the bank will hike be­fore the end of the year.

Newspapers in English

Newspapers from Myanmar

© PressReader. All rights reserved.