Asian markets mixed as attention turns to US elections

Asian markets were mixed Tuesday as focus turned to the US midterm elections, which could impact Donald Trump’s presidency, while Apple suppliers were hit by reports the tech titan had cancelled plans to ramp up output of its new iPhone.

The US goes to the polls in the first major electoral test for Trump since he took the White House and embarked on an “America First” agenda that has split opinion across the country and globally.

While his tax cuts and deregulation have helped fire the economy and push stock markets to multiple record highs earlier this year, there is a growing concern that his long-running trade row with China is beginning to bite.

The vote has the added twist of an investigation that is looking at whether his campaign colluded with Moscow to win the 2016 election. If the Democrats win both houses of congress, they could push harder for impeachment, fuelling uncertainty.

“These midterm elections carry a sizeable legal risk for the (Republicans) which could dent investor confidence as we will likely hear much more from (Russia probe lead counsel) Robert Mueller sooner rather than later,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

In early trade Hong Kong was down 0.2 percent, having lost more than two percent on Monday, while Shanghai edged down 0.6 percent and Taipei lost 0.5 percent.

However, Tokyo was up more than one percent by the break as a weak yen supported exporters, Sydney gained 0.8 percent and Seoul added 0.4 percent. Wellington rose 0.5 percent, Manila put on 0.6 percent and Jakarta climbed 0.3 percent.

Technology firms were among the worst performers, with companies that supply Apple taking a hit after a report in Japan’s respected Nikkei business daily said it had told two Taiwan’s Foxconn and Pegatron to scrap planned new production lines for the iPhone XR.

Pegatron fell four percent and Foxconn was 0.6 percent lower while other tech companies were being sold off.

Alps Electric in Tokyo sank more than one percent, Samsung dropped one percent in Seoul and AAC Technologies was more than seven percent lower in Hong Kong.

Seoul-listed LG Display was 1.5 percent lower and Japan Display gave back 3.7 percent.

Firms linked to Apple were already under pressure after the US giant last week reported weaker-than-forecast iPhone sales and said it would no longer reveal how many it had shifted in its earnings.

Apple shares have fallen almost 10 percent since Thursday.

Past Tuesday’s elections, traders are looking at the Federal Reserve’s latest policy meeting, which is not expected to see another interest rate hike but will be followed for clues about its plans for future moves.

Expectations for more rises has pushed the dollar higher against its peers, though the pound is enjoying some buying as hopes grow that officials are close to an agreement on a post Brexit-deal for Britain.