Asia stocks tumble after Apple issues revenue warning on coronavirus impact
Shares in Asia fell on Tuesday morning, as the new coronavirus outbreak continued to roil companies amid expectations it would cause a slowdown.
Overall, MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.17%.
Earnings of HSBC bank will be in focus on Tuesday. Europe’s largest lender is set to report its full-year 2019 results at 12:00 p.m. HK/SIN.
Analysts expect HSBC to report pre-tax profit for 2019 of about $20 billion, in line with the $19.9 billion profit in 2018, according to a Reuters report. Though the bank is headquartered in London, most of its profits come from Asia, particularly Hong Kong.
Its Hong Kong-listed shares closed 0.42% lower on Monday.
Apple suppliers in Asia fall
Meanwhile, Apple suppliers in Asia fell sharply in the morning, as the tech giant warned it may not meet its quarterly revenue forecast because of lower iPhone supply globally and lower Chinese demand as a result of disruptions from the coronavirus outbreak.
Apple makes most of its iPhones and products in China. The epidemic has caused the company to temporarily halt production and close retail stores in China. Some Apple retail stores reopened in China with reduced schedules last week.
South Korea’a SK Hynix lost 0.95%, and Samsung Electronics declined 1.46%.
The outbreak, which started in China but has since spread globally, is set to impact other companies too. In fact, it could hit as many as five million companies worldwide, a new study showed. Almost half (49%) of the companies with subsidiaries in impacted regions are headquartered in Hong Kong, while the U.S. accounts for 19%, Japan 12% and Germany 5%.
The impact on businesses in China and around the world has dragged down economic growth forecasts for the year.
“Focus is now shifting to the likely economic impact of COVID-19. With data sparse it is very hard to tell, though daily pollution levels are easily available and we note the cumulative pollution for the year is around 20-25% lower than this time last year,” Tapas Strickland, director of economics and markets at the National Australia Bank, wrote in a note on Tuesday. “Overall that suggests a substantial decline in industrial activity in Q1.”
Singapore, one of the worst hit by the outbreak outside China, is expected to unveil its budget on Tuesday. The Southeast Asian nation is expected to spend big, to soften the economic blow from the outbreak which has hit companies and tourism.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 99.003, sliding from an earlier high of 99.208.
The Japanese yen traded at 109.82 against the dollar, little unchanged after hitting above the 110 level briefly last week. The Australian dollar was at 0.6705, weakening slightly from a day before.
What’s on tap for Tuesday (all times in HK/SIN):
4:30 p.m.: Hong Kong unemployment data
5:00 p.m. China new loans, total social financing
— CNBC’s Amelia Lucas and Elliot Smith contributed to this report.