Hang Seng and Nikkei underperform after Apple’s revenue warning

Asian markets fell on Tuesday following the news of Hong Kong and Japan’s Apple stocks were declining sharply after the tech giant issued a revenue warning.

The Hang Seng Index and South Korea’s KOSPI dropped by 1.3% by 10:45 PM ET (02:45 GMT), while Japan’s Nikkei lost 1.6%.  

In China, the Shanghai Composite and the SZE Component lowered by 0.4% and 0.2% respectively.

Apple Inc suppliers in Asia underperformed in morning trade with Japan’s Taiyo Yuden plummeting more than 5%. Meanwhile Alps Alpine and Murata Manufacturing dropped by more than 3%.

In Hong Kong, Sunny Optical plunged 3.4% and Aac Tech fell by 2.9%.

South Korea’s SK Hynix and Samsung Electronics dipped by 1.0% and 1.5% respectively.

“This unexpected news confirms the worst fears of the Street that the virus outbreak has dramatically impacted iPhone supply from China/Foxconn with a demand ripple impact worldwide,” Wedbush Securities analysts Daniel Ives and Strecker Backe wrote in a note cited by CNBC. They added that the magnitude of the impact was “clearly worse than feared.”

“While this news is a tough pill to swallow for the bulls, Apple remains a company significantly exposed to this virus issue given the company’s massive supply and demand tentacles throughout China,” they said.