INSUBCONTINENT EXCLUSIVE:
SHANGHAI: US stock futures fell on Thursday after a rare revenue warning from Apple Inc added to worries about slowing global growth, but a
move by China's central bank to help struggling smaller firms lifted shares there, cushioning losses for Asian markets.
The Cupertino,
California-based tech giant blamed fewer iPhone upgrades and slowing sales in China in warning about revenues in its most recent quarter,
its first such warning since 2007
Its shares tumbled 8 per cent in after-hours trade.
The news also sparked a 'flash crash' in holiday-thinned currency markets as investors
rushed to less risky assets, with Japanese yen soaring against most major currencies in a matter of seconds.
MSCI's broadest gauge of
Asia-Pacific shares outside Japan dipped in early trade but later steadied as Chinese shares climbed
Japanese markets were closed for holidays but Nikkei futures dropped 1.8 per cent.
China's blue-chip CSI300 index was 0.8 per cent higher,
and Hong Kong's Hang Seng gained 0.4 per cent after a bruising Wednesday session.
China's central bank said late on Wednesday it was
adjusting policy to benefit more small firms which are having trouble obtaining financing, in its latest move to support cooling
economy.
The step "is aimed at getting banks of all sizes to lend to SMEs through offering incentives, and is part of government's pledge
to support private investment," analysts at Everbright Sun Hung Kai said in a note.
"Chinese authorities have got luxury of having control
not just of fiscal parts of government's tool case, but also monetary parts of government's tool case," said Jim McCafferty, head of
equity research, Asia ex-Japan at Nomura.
"What's going on right now between US and China, a lot of this is not just about trade, a lot of
And stock market is an instrument of soft power, and if Chinese authorities are able to to influence value of stock market, they will do
whatever it takes to make sure that that happens," he said.
More growth boosting measures are widely expected in China amid expectations
economy will continue to slow in early 2019
Weak China December factory readings this week have spurred a fresh round of selling in global markets.
Apple's surprise announcement
weighed on tech shares across Asia, most notably in Taiwan and South Korea.
Australian shares bounced 1.4 per cent after previous day's
drubbing, helping to offset weakness elsewhere in region
A weaker Aussie dollar, which fell to near decade lows, also boosted exporters.
The mixed performance in Asia comes after shares on Wall
Street slid in early trade Wednesday on growth worries but later clawed back losses, with a surge in oil prices driving gains in energy
shares.
US stock futures were still pointing lower on Thursday, with Nasdaq E-mini futures down 1.9 per cent and SP 500 E-mini futures off
1.1 per cent following Apple's warning.
Apple specifically highlighted slowing Chinese growth and Sino-US trade tensions, exacerbating
investors' concerns about state of global economy.
"The fall in EM manufacturing PMI last month was fairly broad-based and supports our view
that growth in emerging world as a whole will slow this year," Gabriella Dickens, an economist at Capital Economics, said in a note.
News
out of Washington on Wednesday added to grim mood, as a meeting between President Donald Trump and US congressional leaders produced no
agreement to end a partial government shutdown.
Trump's demand for $5 billion in funding for a wall along US-Mexico border triggered
shutdown affecting about a quarter of federal government and 800,000 federal workers.
'FLASH CRASH'Currency markets saw a wild spike in
volatility in early Asian trade, with risk aversion pushing yen sharply higher against US dollar, breaking key technical levels and
triggering stop-loss sales of US and Australian dollars.
The dollar was last 1.2 per cent weaker against yen at 107.52, while Australian
dollar at one point hit levels against Japanese yen not seen since 2011.
The euro was up less than 0.1 per cent, buying $1.1349, and dollar
index, which tracks US currency against a basket of major rivals, was 0.16 per cent weaker at 96.666.
Amid flight to perceived safety, yield
on benchmark 10-year Treasury notes fell to 2.6328 per cent compared with its US close of 2.661 per cent on Wednesday.
The two-year yield,
was at 2.4777 per cent compared with a US close of 2.504 per cent as signs of slowing growth ate away at expectations of further Federal
Reserve rate hikes.
US crude dipped 1.38 per cent at $45.90 a barrel after a sharp rise on Wednesday
Brent crude was down 0.5 per cent at $54.62 per barrel.
Gold was higher as dollar weakened, with spot gold trading up 0.3 per cent $1,288.22
