World shares retreat on growth fears after Apple warning

Annabelle Liang, The Associated Press</span>
Published Thursday, January 3, 2019 6:29AM EST

SINGAPORE -- European and Asian indexes slipped on Thursday after Apple, the world's largest technology company, downgraded its sales projections citing lacklustre Chinese demand. The Japanese yen, seen as a relatively safe asset, surged as traders awaited developments on the U.S. government shutdown and Brexit.

KEEPING SCORE: In Europe, France's CAC 40 retreated 0.5 per cent to 4,664.22 and Germany's DAX was 0.6 per cent lower at 10,519.83. Britain's FTSE 100 index fell 0.2 per cent to 6,722.47. On Wall Street, futures for the broad S&P 500 index gave up 1.4 per cent to 2,475.40. Dow futures lost 1.2 per cent to 23,040.00.

ASIA'S DAY: Most Asian markets racked up more losses after tumbling on the first trading day of 2019. Apples revenue downgrade cast a pall on technology shares, pulling South Korea's Kospi 0.8 per cent lower to 1,993.70. Taiwan's benchmark fell 0.7 per cent to 9,492.42. The Shanghai Composite index dropped less than 0.1 per cent to 2,464.36 and Hong Kong's Hang Seng gave up 0.3 per cent at 25,064.36. Australia's S&P-ASX 200 bucked the regional trend and added 1.4 per cent to 5,633.40. Shares fell in Singapore but rose in Thailand, Indonesia and the Philippines. Japan's markets were closed.

APPLE NOTE: Apple CEO Tim Cook said in a letter to shareholders on Wednesday that he expects the tech giant's revenue for the October-December quarter to fall below internal and analysts' projections. The letter, which was released after the markets closed, said Apple now expects revenue of $84 billion for the quarter. This is around 9 per cent lower than the $91.3 billion estimate from analysts polled by FactSet. The official results will be released on Jan. 29. Cook attributed most of the revenue drop to China, where the economy has been slowing and where U.S. tariffs have been raised on more than $200 billion in goods, although the iPhone hasn't been affected directly so far. The company's shares fell 7.6 per cent to $146 in after-hours trading. Cook's letter added to worries about slowing growth in the world's second largest economy.

ANALYST'S TAKE: "Doubling down on Asia markets for a second day today would be the latest downward revision in Q1 guidance from tech giant, Apple," Jingyi Pan of IG said in a market commentary. "The already shaky foundation for Apple owing to the likelihood of the company's products being enlisted into the tariffs scuffle saw their latest move to lower revenue outlook packing a punch for share prices."

ENERGY: Oil prices, which have fallen about 40 per cent since last October, settled after jumping at the start of the year. Benchmark U.S. crude shed 79 cents to $45.75 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped 2.5 per cent to $46.54 per barrel on Wednesday. Brent crude, used to price international oils, lost 51 cents to $54.40 per barrel. It added 2.1 per cent to $54.91 per barrel in London.

CURRENCIES: The dollar slipped to 107.67 yen from 108.86 yen late Wednesday. The euro rose to $1.1380 from $1.1344.

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