Asia tech stocks dive while Ghosn arrest slams Nissan, MitsubishiBusiness
Technology firms led a sell-off across Asian markets on Tuesday on fresh concerns about demand for Apple's iPhones, while Japanese car giant Nissan and Mitsubishi plunged on news chairman Carlos Ghosn had been arrested over alleged financial misconduct.
After a brief couple of days of stability, panic returned to trading floors following a report that the United States (US) titan had slashed production of its popular handset.
That comes just a week after a supplier suggested the firm had cut orders, fanning speculation the latest incarnation of the gadget is not selling as much as hoped.
Apple collapsed four per cent in US trade with Facebook, Amazon, Google parent Alphabet and Microsoft each diving three per cent or more.
The losses filtered through to Asia, where Apple suppliers were also in trouble.
In Tokyo, Japan Display, which has lost about a third of its value over the past week, was off 3.9 per cent by the break while Alps Electric fell 1.3 per cent. Among other tech firms Sony shed 2.6 per cent and Hong Kong-listed Sunny Optical Technology dived 2.8 per cent.
Taiwan Semiconductor Manufacturing Company shed 1.1 per cent in Taipei and Delta Electronics was off 0.8 per cent.
Broader markets were also well down as investors fret over a number of issues, with attention now turning to next week's G20 summit in Argentina, where US President Donald Trump is expected to meet Chinese President Xi Jinping to talk trade.
There had been some hope that the world's two economies could find a resolution to their painful tariffs row but a clash of words at the weekend between Xi and Trump's vice president Mike Pence has muddied the waters.
“A comprehensive trade agreement at the G20 that rolls back the tariffs still looks unlikely,” warned Bank of Singapore currency strategist Sim Moh Siong. “But a constructive US-China statement, agreement to restart talks and a tariff pause appear to be emerging possibilities.
“The most positive outcome at G20 would be the White House 'stopping the clock' on the now-scheduled ramp-up in tariffs from a 10 per cent rate to a 25 per cent rate, moving that date from 1 Jan 2019 to a later date.”
This, he added, would provide some stability to the Chinese yuan and under-pressure Asian currencies.
Hong Kong fell 1.4 per cent in the morning, Shanghai was off one per cent, while Sydney, Seoul and Singapore each fell 0.8 per cent. Wellington dropped one per cent, Manila 1.2 per cent and Taipei 0.6 per cent.
Tokyo was down 0.9 per cent by lunch.
Nissan lost 4.3 per cent and Mitsubishi sank 7.1 per cent as they prepared to sack Ghosn after it emerged he had been taken into custody as detectives looked into claims he under-reported his income for years.
Ghosn has long been a major player in the car industry and is credited with resurrecting the once-troubled Nissan, which he allied with Mitsubishi and France's Renault.
Renault's share price plunged eight per cent in Paris.
Nissan CEO, Hiroto Saikawa insisted the partnership among the three “will not be affected by this event” but had no details on how the other firms would respond, or who might succeed Ghosn.