By Wayne Cole
SYDNEY (Reuters) – Asian shares slipped on Friday as a warning on smartphone demand from the world’s largest contract chipmaker slugged the tech sector, while high oil prices stirred inflation fears and undermined sovereign bonds.
“The big story for the APAC region today will be fallout from TSMC’s miss, which will weigh heavily on the tech sector, with first order impacts on the Semis and Samsung Electronics/ Galaxy supply chain,” analysts at JPMorgan said in a note.
“The miss appears largely to have been due to Apple iPhones, and so may also weigh on the Apple supply chain.”
Taiwan’s main index <.TWII> slid 1.4 percent with techs sinking 3.5 percent and TSMC off more than 5 percent.
Stocks in South Korea <.KS11> took a 0.3 percent dip, with the tech sector losing 1.6 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> shed 0.8 percent, again led by a 0.7 percent fall in technology.
Japan’s Nikkei <.N225> recouped early losses to rise 0.1 percent as gains in energy and financials outweighed the drop in tech.
Wall Street had also been hit by weak results from tobacco company Philip Morris
The Dow <.DJI> ended down 0.34 percent, while the S&P 500 <.SPX> lost 0.57 percent and the Nasdaq <.IXIC> 0.78 percent.
Oil prices were creeping up again after hitting their highest since late 2014 on drawdowns in global supply and as Saudi Arabia looks to fatten its export revenue.
Brent crude futures
A global oil glut has been virtually eliminated, according to a joint OPEC and non-OPEC technical panel, two sources familiar with the matter said, thanks in part to an OPEC-led supply cut deal in place since January 2017.
Analysts at CBA noted market measures of inflation expectations had spiked higher this week as oil prices surged, with some hitting highs not seen since mid-2014.
That in turn pressured fixed-income debt with yields on 10-year Treasuries
In currency markets, the main mover was sterling which dived late on Thursday when Bank of England Governor Mark Carney cooled expectations for an interest rate hike in May, pointing out there were “other meetings” this year.
Sterling dropped more than a cent to $1.4078
The sudden retreat in sterling helped support the U.S. dollar more broadly and the dollar index <.DXY> was steady at 89.956.
The euro also eased back a touch to $1.2341
On the radar later in the day will be IMF and World Bank meetings in Washington where free trade and protectionism is certain to be high on the agenda along with Sino-U.S. tensions.
(Editing by Shri Navaratnam and Kim Coghill)