Stock indexes in Japan and South Korea suffered earnings-related hits Friday, with Samsung Electronics falling 4% after rival Apple’s latest quarterly financial results.
Apple AAPL, +0.21% reported a slight drop in iPhone sales in the three months through December and gave a downbeat revenue forecast for the current quarter. Its shares still rose 3.4% in after-hours trading as the tech giant’s overall results beat expectations and because the stock‘s performance had been lackluster for several months on worries about demand for the iPhone X.
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Samsung 005930, -4.26% has its own line of smartphones but also makes various phone components including chips and screens. “The market is concerned about the uncertainty” surrounding Samsung’s outlook, said S.K. Kim, an analyst at Daiwa Capital Markets. Chip maker SK Hynix 000660, -2.96% dropped 2.5%, contributing to the Kospi’s SEU, -1.68% 1.5% decline.
Japan’s Nikkei Stock Average NIK, -0.90% , closed down 0.9% following earnings-related news. Airline ANA Holdings 9202, -4.06% and investment bank Nomura Holdings 8604, -2.89% reported results after the bell Thursday, and their shares fell 4.1% and 2.9%, respectively.
Chinese stocks SHCOMP, +0.44% fell further Friday with the Shenzhen Composite, made up of some of the country’s most innovative and high-tech firms, recently down 0.9%, putting the week’s slide at 7.5% — the most in two years. A number of listed Chinese firms have issued profit warnings in recent days.
Friday’s move compounded weakness on the back of local data this week that showed China’s manufacturing-sector growth slowed in January. In addition, the People’s Bank of China has drained money from the financial system via open-market operations for six consecutive days.
Rob Carnell, chief economist and head of research for Asia-Pacific at ING in Singapore, said investors will be looking to service-sector data next week for sign of slowness there. “If the services are holding up OK, then the markets won’t be that upset about manufacturing looking soft because it would show the shift from manufacturing to services and consumer spending.”
Globally, Carnell said the market will be focused on the European Central Bank meeting next week for any clues on when the bank plans to end quantitative easing. Expectations of that has sent money to Europe, helping push up Treasurys and weakening the dollar.
“Equity markets globally are becoming aware that bond yields are increasing, and ultimately that means scope for rate hikes” and stimulus efforts unwinding, said Stuart Ive, senior client manager at OM Financial. “These moves in the bond market might start to get investors a bit twitchy.”
The 10-year U.S. Treasury yield TMUBMUSD10Y, +0.25% nearly reached 2.8% in Asian trading and was at four-year highs. The WSJ Dollar Index BUXX, +0.37% was recently up 0.2% and S&P 500 futures ESH8, -0.68% fell 0.1%.
In India, where the government released its budget for the coming fiscal year on Thursday, the Sensex benchmark 1, -2.34% was recently down 1.5% as investors weigh the reintroduction of a capital-gains tax.
Australia’s S&P/ASX 200 XJO, +0.51% climbed 0.5%, boosted by a 2.4% jump in the energy sector, that group’s best day in three months. Oil futures CLH8, +0.09% were higher with the U.S. benchmark up 0.5% at $66.11 a barrel, poised to notch a fresh three-year settlement high. ANZ Bank said the market’s focus has returned to the positive macroeconomic backdrop, looking past record levels of U.S. oil production.
Bitcoin prices BTCUSD, -10.61% fell further in Asia, approaching $8,500, according to CoinDesk, about 15% below levels from 24 hours earlier. The volatile cryptocurrency is at levels last seen in late November.