HONG KONG (MarketWatch) — Asia stocks on Friday took deep losses that worsened the weekly performance for many benchmarks, as weaker-than-expected results from Apple Inc., as well as regional firms such as China Unicom and Canon Inc. sparked a sell-off.
China’s Shanghai Composite Index /zigman2/quotes/206600939/delayed CN:000001 -0.06% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.49% each skidded 1.7%, Taiwan’s Taiex lost 1.8%, Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.39% fell 1.4% and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO -0.33% retreated 0.8%.
The day’s steep losses came in the wake of a strong recent performance for some regional markets. Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -1.09% , in particular, fell 1.1% after gaining in the previous 10 sessions.
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Ben Kwong, chief operating officer at KGI Asia, said “investors are shifting the focus to earnings, and the upward trend is losing momentum.”
Kwong said the Hong Kong market in particular was technically overbought after a string of advances, and that profit-taking pressure emerged alongside some weak corporate news. He termed the selling “healthy and expected.”
Taiwan’s Taiex was the biggest decliner of the week, shedding 3.7%. Those losses were followed by a 2.9% drop for the Shanghai Composite, a 2.7% decline for the Kospi, and a 2.2% fall for the S&P/ASX 200. Japan’s Nikkei lost 0.8%, while the Hang Seng Index ended the week fractionally lower.
Effect of earnings
Friday’s trading in Asia began on a subdued note for most regional markets, Apple’s /zigman2/quotes/202934861/composite AAPL -2.26% earnings fell short of estimates, weighing on its shares in U.S. after-hours trading. A report from U.S. e-retailer Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -2.65% /zigman2/quotes/210331248/composite AMZN -2.65% was also similarly disappointing. Read: Apple faces tight supply in busy quarter.
A poor set of earnings reports, or outlook, issued by Asian firms added to the selling pressure.
Shares of China Unicom Hong Kong Ltd. /zigman2/quotes/205091392/delayed HK:762 -1.04% /zigman2/quotes/205476740/composite CHU -0.46% tumbled 7.6% as a 27% jump in its third-quarter profit fell short of estimates, leading to a downgrade from Standard Chartered.
Shares of its parent Bank of China Ltd. /zigman2/quotes/204682472/delayed HK:3988 -0.93% /zigman2/quotes/201568493/delayed BACHY +0.10% /zigman2/quotes/209359942/delayed CN:601988 -0.28% , meanwhile, were swept away in weak broad markets although the lender posted better-than-expected results. The stock slipped 0.3% in Hong Kong and 1.1% in Shanghai. Read: Bank of China Q3 net profit up 17%.
Maanshan Iron & Steel Company Ltd. /zigman2/quotes/205365330/delayed HK:323 +0.34% /zigman2/quotes/200590525/delayed CN:600808 -0.71% tumbled 6.9% in Hong Kong and 4.4% in Shanghai after reporting a net loss in the three months ended September, as steel prices dropped in July and August.
/zigman2/quotes/204682472/delayed 3988 3.19, -0.03, -0.93%
/zigman2/quotes/207639533/delayed 7751 2,776.00, -11.50, -0.41%
/zigman2/quotes/202054799/delayed 6954 20,180.00, -290.00, -1.42%
/zigman2/quotes/209800866/delayed 005930 59,200.00, -800.00, -1.33%
Robotics firm Fanuc Corp. /zigman2/quotes/202054799/delayed JP:6954 -1.42% /zigman2/quotes/206262686/delayed FANUF -2.94% gave up 3.1% after posting a drop in profit and revenue for the fiscal first half.
The Japanese heavy-manufacturing sector also took an earnings hit following the report, with Hitachi Ltd. /zigman2/quotes/203839937/delayed JP:6501 -0.26% /zigman2/quotes/203416411/delayed HTHIF +2.28% losing 2.8% and Fuji Electric Co. /zigman2/quotes/205163888/delayed JP:6504 -0.89% shedding 7.5%.
Shares of heavyweight Samsung Electronics Co. /zigman2/quotes/209800866/delayed KR:005930 -1.33% /zigman2/quotes/202367843/delayed SSNLF 0.00% dropped 2.7% in Seoul despite a record quarterly profit, as concerns mounted that its earnings may have peaked. Read: Samsung posts profit jump but cautious outlook.
Shares of Kia Motors Corp. /zigman2/quotes/206019389/delayed KR:000270 -1.23% /zigman2/quotes/205439169/delayed KIMTF +8.21% declined 5.6% after its third-quarter net profit rose 28% from the year-ago period, but fell 24% from the preceding quarter. Read: Kia Motors net profit jumps 28%
Shares of Macquarie Group Ltd. /zigman2/quotes/206727308/delayed AU:MQG -0.28% /zigman2/quotes/209628452/delayed MQBKY -0.64% jumped 3.5% as the Australian investment-banking firm’s 18% increase in half-year net profit missed estimates. Read: Macquarie profit misses estimates.
Bourse operator Hong Kong Exchanges & Clearing Ltd. /zigman2/quotes/200234512/delayed HK:388 -1.40% /zigman2/quotes/201215503/delayed HKXCY -0.45% skidded 2% on a weak outlook for its third quarter results.
But not all earnings-related news led to stock losses.
In Tokyo, Advantest Corp. /zigman2/quotes/206869087/delayed JP:6857 -0.89% /zigman2/quotes/207472799/delayed SHCAF +3.24% jumped 3.6% after swinging to a profit in the first-half of the year from losses a year earlier.
And in Taipei, shares of Apple’s component supplier, Taiwan Semiconductor Manufacturing Co. /zigman2/quotes/207385621/delayed TW:2330 -0.15% /zigman2/quotes/204359850/composite TSM -1.58% , climbed 3%. The advance came as Barclays upgraded the stock to overweight from equal weight, saying short-term cyclical concerns were already priced in and that the company will maintain its global leadership in metal castings on expected orders from Apple in the first quarter of 2014. Read: Apple puts squeeze on Taiwan’s TSMC.