Asian stocks outside China rose for a second day on Friday, following gains in US shares, led by industrial and financial companies. Equities in Shanghai tumbled, posting the biggest weekly drop since June 2008.
The Shanghai Composite Index fell 6.4 percent on Friday amid growing concern that China’s longest-ever bull market has propelled valuations to unsustainable levels.
“With Chinese authorities wanting the share market to be strong, but not manic, the latest share market correction means that it wouldn’t be surprising to see another People’s Bank of China rate cut or required reserve ratio reduction soon,” said Shane Oliver, global strategist at AMP Capital Investors Ltd in Sydney. “Volatility is to be expected as it has risen a bit too far, too fast.”
The Shanghai Composite, which reached the highest level since 2008 on Friday last week, has since tumbled 13 percent. Analysts are increasingly warning stocks will fall after the gauge more than doubled in the past 12 months.
The bull market, which turned 928 days old on Friday, is the longest since Chinese bourses opened for trading in 1990 and more than five times the average lifespan of the nation’s previous bull markets.
The MSCI Asia Pacific Index climbed 0.554 percent to 147.18 on Friday in Hong Kong, paring this week’s slide to 0.7 percent. The Standard & Poor’s 500 Index jumped 1 percent on Thursday in New York and the NASDAQ Composite Index closed at a record high after the US Federal Reserve signaled it would continue to support the economy even as growth picks up.
In Taipei, shares staged a rebound on Thursday to close above the 9,200-point mark as investors took their cue from Wall Street’s overnight rally. Markets were closed on Friday for a holiday. The TAIEX closed 0.31 percent higher at 9,218.37 on Thursday, paring this week’s losses to 0.9 percent.
Outside of China, most markets in the region also rose on Friday. Tokyo ended 0.9 percent higher, Sydney rose 1.3 percent and Seoul gained 0.3 percent. Mumbai and Wellington each gained 0.6 percent, Jakarta rose 0.8 percent, Hong Kong added 0.3 percent and Singapore edged up 0.02 percent.
Bangkok dropped 1.1 percent, while Manila was marginally lower, dipping 5.69 points to 7,601.17.
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