With most global markets closed for Christmas, the only overnight action was in Asia, which saw Chinese equities fall with tech stocks and names linked to Apple the worst performers after a report that Apple cut forecast iPhone X sales forecasts, while property firms surged on speculation of coming consolidation. As a result, after opening higher, the Shanghai Composite Index closed 0.5% lower on the day, the blue-chip CSI 300 Index fell 0.3%, the Shenzhen Composite Index retreated 0.9%, while the ChiNext small-cap and tech Index dropped 1.3%. The PBOC’s refusal to conduct a reverse repo for the second day did not boost the market mood.
The biggest Asian losers were Apple suppliers after the Taipei-based Economic Daily News reported that Apple has cut its sales forecast for the iPhone X by 40% from 50 million in Q1 to only 30 million. The report also noted that Foxconn’s Zhengzhou plant stopped recruiting workers. Following the news, Apple supplier Lens Technology Co. dropped 8.4% to be among worst performers on the ChiNext measure; Shenzhen Sunway Communication Co. -2.2%, Luxshare Precision Industry and GoerTek both dropped at least 4%. As the table below shows, it was a sea of red for Apple suppliers.
This post was published at Zero Hedge on Dec 25, 2017.