Asian stocks dropped for a second week this month, trimming the regional benchmark index’s first monthly advance since April, as US lawmakers failed to break a deadlock over raising the US federal debt limit and China increased lending restrictions to local governments.
Li & Fung Ltd (利豐), the largest supplier of toys and clothes to retailers including Target Corp and Wal-Mart Stores Inc, sank 8.7 percent in Hong Kong on speculation shipments to the US will weaken. Nintendo Co, the maker of the Wii game consoles, slumped 18 percent after slashing its full-year profit forecast by 82 percent. China Vanke Co (萬科企業), China’s biggest developer, fell 3.2 percent in Shenzhen after the government prohibited banks from renewing loans to local financing vehicles.
The MSCI Asia Pacific Index slid 1.6 percent as better-than-estimated earnings from AIA Group Ltd (美國友邦保險) and Cheung Kong Infrastructure Ltd (長江基建集團) were overshadowed by concern the US may default on its debt if lawmakers can’t reach an agreement on raising the government’s borrowing limit by Tuesday. For the month, the gauge increased 2.6 percent after European leaders announced steps toward easing the region’s sovereign debt crisis.
“It’s unbelievable, these guys are not just playing with financial markets, but their own constituents’ jobs,” said Sydney-based Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. “It’s certainly adding to stock-market nervousness. I think they will eventually get a deal that avoids massive spending cuts or default, but the risk is growing that they won’t.”
Taiwan’s TAIEX dropped 1.38 percent on the week, closing on Friday at 8,644.18, Japan’s Nikkei 225 Stock Average sank 3 percent, while South Korea’s KOSPI declined 1.8 percent. China’s Shanghai Composite Index dropped 2.5 percent and Hong Kong’s Hang Seng Index was little changed.
Australia’s S&P/ASX 200 Index slumped 3.9 percent as a report published on Wednesday showed the nation’s inflation rate gained more than economists forecast last quarter, increasing the chance that Reserve Bank of Australia Governor Glenn Stevens will resume a tightening policy.
The regional benchmark index lost 0.7 percent this year through Friday, compared with a gain of 2.8 percent by the S&P 500 and a drop of 3.8 percent by the STOXX Europe 600 Index.
In other markets on Friday:
Manila rose 0.46 percent, or 20.83 points, from Thursday to 4,503.63.
Wellington closed flat, edging down 1.16 points from Thursday to 3,395.63.
In Mumbai, the Bombay Stock Exchange dropped 12.32 points, or 0.07 percent, from Thursday to 18,197.2 in the wake of this week’s latest interest rate hike and investor fears of further rises in the months ahead.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by