EMERGING MARKETS-Asian tech pullback knocks emerging stocks off 3-yr high

LONDON, Sept 13 (Reuters) – A pullback in the shares of Apple component suppliers in Asia knocked emerging equities off a three-year high on Wednesday, but China’s yuan steadied after three days of losses.

MSCI’s benchmark emerging equities index was down 0.1 percent with Asian manufacturing markets leading the losses after Apple disappointed by saying its new iPhone would ship later than expected.

Although Asian markets overall touched a fresh 10-year high, tracking record highs on Wall Street, several emerging market index heavyweights fell.

MSCI’s emerging tech index, the biggest part of the overall MSCI emerging market benchmark, retreated from record high after gaining almost 50 percent so far this year.

“Against the backdrop of Apple we are seeing a drop in the hardware and semiconductor subsectors, which make up some 40 percent of the EM IT sector,” said Peter Garnry, head of equity strategy at Saxo Bank in Stockholm.

“There is some retreat but there were very strong expectations leading up to the iPhone launch — even Apple shares have fallen — but we think that overall, the environment for IT stocks continues to be positive.”

Taiwan stocks dropped 0.7 percent, with shares of Apple supplier Taiwan Semiconductor Manufacturing Co, the world’s biggest contract chip maker, falling 0.5 percent, while Hon Hai Precision Industry slipped 1.3 percent.

Hong Kong shares fell 0.3 percent whilst Chinese Apple-linked stocks such as Zhejiang Crystal Optech tumbled 6.7 percent and Goertek shed 3.6 percent.

South Korean shares slipped 0.2 percent, weighed down also by lingering worries over tensions between the United States and nuclear-armed North Korea.

U.S. President Donald Trump said the new sanctions agreed on North Korea were nothing compared to what would have to happen to deal with Pyongyang’s nuclear programme.

Secondary sanctions on Chinese banks are on hold to allow Beijing to show it will enforce the curbs.

China’s yuan firmed after three straight sessions of losses, rising 0.1 percent, although the central bank fixed the yuan at a weaker midpoint.

Chinese mainland shares also traded up around 0.15 percent.

South Africa’s rand was one of the biggest fallers, weakening 0.3 percent against the dollar. On Tuesday court papers showed that South Africa’s anti-graft watchdog had consulted President Jacob Zuma’s legal advisers on a proposal to change the central bank’s mandate. The bank says this undermined the watchdog’s independence.

The Polish zloty weakened 0.2 percent against the euro, whilst Polish shares also fell 0.2 percent. The European Union has given Poland one month to address concerns over a judiciary overhaul or face a court challenge.

Hungary’s forint slipped 0.15 percent against the euro and Budapest stocks fell 0.2 percent, with Hungary under pressure to implement a ruling by the EU’s top court to take in refugees.

Analysts at Societe Generale noted that inflows into emerging market assets had slowed, but any meaningful weakness in currencies should be viewed as a buying opportunity until there was a “tangible deterioration” in underlying fundamentals.

The Brazilian real was steady after posting its biggest daily drop in a month on Tuesday when a Supreme Court judge authorised a fresh investigation into President Michel Temer for suspected corruption.

For GRAPHIC on emerging market FX performance 2017, see For GRAPHIC on MSCI emerging index performance 2017, see

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see) Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg

on year

Morgan Stanley Emrg Mkt Indx 1101.29 -0.97 -0.09 +27.72

Czech Rep 1039.03 +2.95 +0.28 +12.74

Poland 2503.97 -1.91 -0.08 +28.55

Hungary 38027.35 -49.53 -0.13 +18.82

Romania 8056.23 +46.79 +0.58 +13.71

Greece 810.47 -0.28 -0.03 +25.92

Russia 1130.57 +6.34 +0.56 -1.89

South Africa 49896.30 -74.55 -0.15 +13.65

Turkey 09288.71 +159.06 +0.15 +39.87

China 3385.54 +6.05 +0.18 +9.08

India 32302.11 +143.45 +0.45 +21.32

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2017

Czech Rep 26.11 26.10 -0.02 +3.45

Poland 4.26 4.26 -0.19 +3.28

Hungary 307.53 307.00 -0.17 +0.42

Romania 4.60 4.60 -0.03 -1.42

Serbia 119.14 119.21 +0.06 +3.53

Russia 57.58 57.63 +0.10 +6.40

Kazakhstan 339.07 339.42 +0.10 -1.60

Ukraine 26.06 26.00 -0.23 +3.61

South Africa 13.04 13.00 -0.32 +5.33

Kenya 102.85 102.80 -0.05 -0.47

Israel 3.54 3.54 +0.13 +8.86

Turkey 3.43 3.43 +0.00 +2.76

China 6.53 6.53 +0.09 +6.37

India 63.98 64.03 +0.07 +6.20

Brazil 3.13 3.12 -0.02 +4.10

Mexico 17.74 17.73 -0.07 +16.77

Debt Index Strip Spd Chg %Rtn Index

Sov‘gn Debt EMBIG 312 1 .01 8 06.78 1

Reporting by Claire Milhench; additional reporting and graphic
by Sujata Rao; Editing by Raissa Kasolowsky

Our Standards:The Thomson Reuters Trust Principles.

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