The dawning of 2024 has cast a shadow across Asia’s stock markets, especially for tech giants such as Apple and its suppliers. The storm began with a 4% plunge in Apple’s shares after Barclays slapped the iPhone maker with an “underweight” rating, setting a new price target of $160. The aftershocks were felt deeply in South Korea and Taiwan, particularly among major tech firms and chipmakers.
In South Korea, the Kospi index sunk by 2.34%, dragging down heavyweights like Samsung Electronics, LG Corporation, and SK Hynix. Meanwhile, Taiwan’s Weighted Index staggered with a 1.65% drop, causing Taiwan Semiconductor Manufacturing Company and Hon Hai (Foxconn) to reel from losses.
India too bore the brunt of disappointing news, as S&P Global’s report on the country’s factory activity for December failed to meet expectations. This had a ripple effect on Australia’s S&P/ASX 200, which retreated by 1.37%, even after reaching an all-time high in a previous session.
The dark cloud reached even the financial hubs of Hong Kong and China, with the Hang Seng index dipping by 0.94% and China’s CSI 300 closing 0.24% lower.
While Japan’s markets laid dormant, tragedy struck at Tokyo’s Haneda airport. A Japan Airlines flight collided with a coast guard aircraft, resulting in five casualties, including the Coast Guard aircraft crew en route to provide relief for an earthquake that struck Japan on New Year’s Day.
Amidst the gloom, the Adani Group companies witnessed a significant surge in their stocks after India’s Supreme Court rejected a probe request into alleged market manipulation. This propelled shares of Adani companies skyward, led by Adani Energy with almost a 7% gain, closely followed by Adani Total Gas with an increase of 5.83%.
Meanwhile, China’s online gaming stocks stirred up the trading world, as Hong Kong-listed shares of Chinese online gaming firms rose following the removal of a regulatory official overseeing the gaming sector. Companies like Tencent and NetEase reaped the benefits of this shift.
In the automotive industry, Chinese automaker BYD outpaced Tesla in total production figures for new energy vehicles in 2023, churning out over 3 million units. However, their stock saw a decrease, likely due to Tesla’s lead in battery-only output.
On the other hand, Apple’s downgrade cast a pall over its suppliers in Asia. Shares of Samsung Electronics and Apple chip supplier Taiwan Semiconductor Manufacturing Corp took a hit, reflecting the overall uncertainty in the tech market.
While the year commenced on a solemn melody for the markets, investors still sought out silver linings. A strategist at an Australia-headquartered investment firm expressed optimism for select sectors of the Chinese economy. Similarly, Goldman Sachs added a number of stocks to its list of top picks, projecting significant upside for them.
The private real estate market in Singapore painted a grim portrait as annual housing sales plummeted to their lowest level in seven years. This followed a cooling trend in the private residential price index, which climbed 6.7% in 2023, a decrease from an 8.6% rise in the previous year.
These market shifts sent ripples across the globe. As oil prices fell in response to escalating Red Sea tensions and record U.S. production levels, the U.S. stock market saw mixed results on its first trading day of the year. The S&P 500 finished lower, while the Dow Jones Industrial Average managed to edge higher.
The day did not favour the cybersecurity industry either, as cybersecurity stocks and ETFs lagged behind the broader market, with prominent companies like Crowdstrike and Zscaler witnessing significant declines.
In essence, 2024 has begun with its fair share of trials for the Asian and global markets. The effects of Apple’s downgrade have reverberated through various industries, affecting not only the company itself but also its suppliers and the broader market. The coming months will reveal how these companies and the markets at large weather this storm.
