Asian stocks this well fell the most since November, as Apple Inc suppliers declined after the US tech giant reported its weakest sales since 2009 and some investors speculated shares may have risen too far, too fast.
Hon Hai Precision Industry (鴻海精密), which assembles iPads and iPhones for Apple, slid 2.3 percent to NT$83.40 in Taipei trading. Samsung Electronics Co fell to the lowest in almost two months in Seoul, as the world’s largest maker of mobile phones said the strengthening won may cut operating profit by at least 3 trillion won (US$2.8 billion) this year. Sony Corp soared in Tokyo trading as the TOPIX posted its longest streak of weekly gains since January 1973, boosted by the yen’s weakness against the US dollar.
The MSCI Asia Pacific Index fell 0.7 percent to 131.74. Gains in Japanese shares limited declines on the broader pan-Asian benchmark as speculation the new government would take steps to end deflation pushed the TOPIX higher for an 11th week. The MSCI Asia Pacific excluding Japan Index dropped 0.8 percent.
“Markets are at highs and some investors are becoming cautious after everyone turned bullish on stocks,” said Koji Toda, chief fund manager at Tokyo-based Resona Bank. “Most investors are still optimistic on the equity market. Just because markets are falling today doesn’t mean they will continue to drop.”
The MSCI Asia Pacific index, the benchmark regional equities gauge, surged to the highest level in 17 months on Tuesday. That left the measure trading at 14.3 times average estimated earnings compared with 13.6 for the Standard & Poor’s 500 Index and 12.3 times for the STOXX Europe 600 Index, according to data compiled by Bloomberg.
International investors are the most bullish on stocks in at least three-and-a-half years, with close to two-thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey published on Tuesday. As the global financial and business elite gathered in Davos, Switzerland, for their annual forum, 53 percent of respondents to the Bloomberg Global Poll also said equities would offer the highest return in the next year.
Taiwan’s TAIEX slid 0.8 percent this week to close at 7,672.58. While the index extended its losses on Friday, it garnered technical support as it approached 7,600 points and investors, with plenty of liquidity on their hands, pursued bargains, dealers said.
Select Taiwanese suppliers to Apple, in particular Hon Hai, also showed their resilience on Friday by outperforming the broader market, an indication that Apple’s negative leads have largely been digested, they said.
“Look at Hon Hai. After a recent consolidation of the stock, investors were more willing to buy its shares to take advantage of the cheap valuation,” Concord Securities (康和證券) analyst Kerry Huang said.
Australia’s S&P/ASX 200 Index rose 1.3 percent this week, to the highest level since April 2011. The gauge advanced for the past eight days, its longest streak of advances in almost three years. Consumer prices last quarter rose at a slower-than-expected pact, a report showed on Wednesday, pushing down the Australian dollar and giving the central bank scope to reduce interest rates further.
Hong Kong’s Hang Seng Index fell 0.1 percent and China’s Shanghai Composite Index slid 1.1 percent. Singapore’s Straits Times Index gained 1.8 percent.
Japan’s TOPIX gained 0.6 percent, marking its longest weekly winning streak since 1973. The Bank of Japan this week said it would shift to US Federal Reserve-style open-ended asset purchases and the yen weakened as falling consumer prices added to the case for further easing.
In other markets on Friday:
Manila closed 0.82 percent higher, adding 50.37 points from Thursday to 6,167.64.
Mumbai rose 0.9 percent, or 179.75 points, to 20,103.53.
Wellington rose 0.24 percent, or 9.91 points, to 4,199.82.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to