Apple suppliers fall in Taiwan; New Zealand stocks rise after election
Asia-Pacific markets ended mostly lower on Monday after the Chinese government's action on real estate and cooling sentiment about Apple
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Investors in the region largely shrugging of election results in Germany and New Zealand.
Hong Kong's Hang Seng lost 1.4%, with property developers bearing the brunt of the losses. Those stock in both Hong Kong and China -- some up 300% or 400% this year as strong sales growth overcame concerns the shares were running ahead of themselves -- were hit by a widening net of measures from Beijing to control home prices.
The spread of controls from first-tier to second-tier cities may not in and of itself matter to investors who have been buying the sector despite the fundamentals, said China Merchants Bank strategist Daniel So. But it "may be an excuse in the short-term for a stock-price correction."
Shares of China Evergrande Group (3333.HK) ended 8.8% lower, while Sun Hung Kai Properties Ltd. (0016.HK) fell 3.2%.
Shanghai Composite Index closed 0.3% lower.
Apple-related stocks continued their weakness (https://blogs.wsj.com/moneybeat/2017/09/25/sales-softness-for-iphone-8-hits-asia-suppliers/) as investor enthusiasm wanes following the unveiling of the latest iPhones two weeks ago. Initial consumer demand looks similarly cool, helping send Apple shares down 5% last week, the biggest decline in 17 months.
The stock benchmark in Taiwan, home to many Apple suppliers, fell 1.1%, adding to Friday's 1.2% drop. That put the Taiex index , strong over the past year, at five-week lows. Wistron (3231.TW) dropped 2%, Compal Electronics (2324.TW) lost 5.3% and Foxconn Technology (2354.TW) slid 3.3%.
The island's stock market has been strong of late, due in part to optimism about Apple Inc.'s (AAPL) new handset offerings. But that positive sentiment has cooled since the smartphones were rolled out and shares of Apple's Taiwanese suppliers have fallen accordingly.
In Hong Kong, Apple suppler AAC Technologies (2018.HK) finished down 6.7%, cutting its 2017 gain to 81%.
Voters in Germany upset the political balance by casting fewer ballots than expected for Angela Merkel's incumbent party and giving the anti-immigration Alternative for Germany party enough to make it the first far-right party to enter the Bundestag in decades. But "a huge influence on the legislative process" isn't likely as AfD alone can't block legislation, said Sylvain Broyer, head of economics at Natixis.
The euro slipped against other major currencies.
"While Germany's leadership as a pillar of stability in Europe is sustained, the strong showing of the populist far-right and setbacks for the SPD are a surprise," said Michael Strobaek, global chief investment officer at Credit Suisse.
In New Zealand's election, the incumbent National Party fell three seats short of an outright majority as the main opposition party gained less seats than expected. The status quo helped New Zealand's benchmark stock index close up 0.6%, not far from last month's record high.
Also helping equities there was a 1% drop for the New Zealand dollar , giving up some of this month's gain; a weaker currency helps make the country's exports cheaper.
Japan's Nikkei Stock Average rose 0.5%, with a softer yen again boosting that export-heavy market. Equities there have outperformed the past two weeks as the currency has pulled back. The dollar bought Yen112.20, compared with Yen111.99 late Friday in New York.
After the Japanese market closed on Monday, Prime Minister Shinzo Abe called a snap general election in a bid to consolidate power (http://www.marketwatch.com/story/japans-leader-abe-calls-an-early-general-election-2017-09-25) amid a struggle to resolve a crisis with North Korea, according to media reports. Abe said he'll dissolve parliament on Thursday Sept. 28, but gave no date for the election.
Sara Sjolin contributed to this report
(END) Dow Jones Newswires
September 25, 2017 06:33 ET (10:33 GMT)