Monday 20 November 2017

Apple shipping delay takes shine off worldwide rally

Tim Cook introduces iPhone X
Tim Cook introduces iPhone X

Disappointment over the timing of Apple's iPhone X release hampered further gains for world stock markets on Wednesday after an easing of concerns about North Korea sent indices to record highs.

While a broadly-weaker yen pushed Tokyo higher, MSCI's main indicator of Asian shares outside Japan fell back from a 10-year peak and Europe's main markets were flat.

Apple suppliers including AMS and Dialog fell by 1-3pc in morning trade in Europe, with traders citing the later-than-expected November 3 shipping date for the new iPhone. British semi-conductor firm IQE Plc sank more than 6pc.

Apple shares, which finished with a small loss on Tuesday, fell another 0.4pc in pre-market trade. Wall Street overall was seen opening slightly lower.

"It would appear that a running start to the week and fresh record highs in the S&P 500 has proven a little much for some traders, with profit taking seen ahead of Wednesday's open," said Craig Erlam, an analyst with online broker Oanda.

The pan-European STOXX 600 dipped 0.1pc as weakness in chipmakers was compounded by a drop in miners.

Chipmakers have been the best-performing among Europe's tech stocks this year, accounting for a large chunk of the sector's outperformance. AMS shares have gained 165pc year-to-date.

"The economics of the Apple announcement are interesting because it will really test this theory that inflation is going to be weak," said Mike Bell, global markets strategist with JP Morgan Asset Management in London.

"With the iPhone coming in around $1,000 it will be interesting to see how healthy demand is. If it's relatively healthy I think it shows that there is still quite a lot of pricing power for US companies and consumers have confidence."

In currency markets the dominant trend this week has been a recovery for the dollar and sterling. The dollar hit a 12-day high above 110 yen in Asian time before easing back as traders awaited US inflation numbers on Thursday.

Britain's pound hit a one-year high above $1.33 and a six-week high on a trade-weighted basis before falling back after weak wage data that may undermine any threat the Bank of England might make about raising interest rates.

After a soft start, oil prices were around half a percent higher after the International Energy Agency (IEA) said the global oil surplus was starting to shrink due to robust global demand and an output drop from Opec and other producers. (Reuters)

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