HONG KONG, Nov 6 — Asian markets mostly rose today as focus turned to the US midterm elections, which could impact Donald Trump’s presidency, while Apple suppliers suffered on reports the tech titan had cancelled plans to ramp up output of its new iPhone.
The US goes to the polls in the first major electoral test for Trump since he took the White House and embarked on an “America First” agenda that has split opinion across the country and globally.
While his tax cuts and deregulation have helped fire the economy and push stock markets to multiple record highs earlier this year, there is a growing concern that his long-running trade row with China is beginning to bite.
The vote has the added twist of an investigation that is looking at whether his campaign colluded with Moscow to win the 2016 election. If the Democrats win both houses of congress, they could push harder for impeachment, fuelling uncertainty.
“These midterm elections carry a sizeable legal risk for the (Republicans) which could dent investor confidence as we will likely hear much more from (Russia probe lead counsel) Robert Mueller sooner rather than later,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
Hong Kong added 0.7 per cent, having lost more than two per cent on Monday, while Tokyo was up more than one per cent thanks to a weaker yen.
Sydney gained one per cent and Seoul added 0.6 per cent. Wellington rose 0.4 per cent and Jakarta climbed 0.1 per cent.
However, Shanghai ended down 0.2 per cent and Taipei lost 0.7 per cent.
In early European trade London and Paris each edged up 0.1 per cent, while Frankfurt dipped 0.2 per cent
China ‘ready’ for trade talks
Hopes that China and the US can resolve their tariff row were given a boost by comments from Chinese Vice President Wang Qishan that he felt the two sides would reach an agreement.
“Both China and the US would love to see greater trade and economic cooperation,” he told the Bloomberg New Economy Forum in Singapore.
“The Chinese side is ready to have discussions with the US on issues of mutual concern and work for a solution on trade acceptable to both sides.”
However, Scott Kennedy, deputy director of China studies at the Center for Strategic and International Studies in Washington, warned the row still has some time to run.
“We’re going to see these two sides continue to dig in their heels—both sides still think they have the upper hand,” he said. “They’ll continue to do this dance, and all of us will continue to watch.”
Technology firms were among the worst performers, with companies that supply Apple taking a hit after a report in Japan’s respected Nikkei business daily said it had told Taiwan’s Foxconn and Pegatron to scrap planned new production lines for the iPhone XR.
Pegatron fell 4.6 per cent though Foxconn bounced back to rise 0.2 per cent while other tech companies were being sold off.
Alps Electric in Tokyo sank 0.8 per cent, Samsung dropped 0.1 per cent in Seoul and AAC Technologies was 3.5 per cent lower in Hong Kong.
Seoul-listed LG Display was 0.6 per cent lower and Japan Display gave back 3.7 per cent.
Firms linked to Apple were already under pressure after the US giant last week reported weaker-than-forecast iPhone sales and said it would no longer reveal how many it had shifted in its earnings.
Apple shares have fallen almost 10 per cent since Thursday.
Past today’s elections, traders are looking at the Federal Reserve’s latest policy meeting, which is not expected to see another interest rate hike but will be followed for clues about its plans for future moves.
Expectations of more rises have pushed the dollar higher against its peers, though the pound is enjoying some buying as hopes grow that officials are close to an agreement on a post Brexit-deal for Britain.
Key figures around 0820 GMT
Tokyo — Nikkei 225: UP 1.1 per cent at 22,147.75 (close)
Hong Kong — Hang Seng: UP 0.7 per cent at 26,120.96 (close)
Shanghai — Composite: DOWN 0.2 per cent at 2,659.36 (close)
London — FTSE 100: UP 0.1 per cent at 7,112.47
Euro/dollar: UP at US$1.1410 from US$1.1407 at 2130 GMT
Pound/dollar: UP at US$1.3059 from US$1.3045
Dollar/yen: UP at 113.40 yen from 113.20 yen
Oil — West Texas Intermediate: DOWN 24 cents at US$62.86 per barrel
Oil — Brent Crude: DOWN 52 cents at US$72.65 per barrel
New York — Dow: UP 0.8 per cent at 25,461.70 (close) — AFP
