* Apple says will not meet revenue target for Jan-March
* S&P500 futures down 0.3%, mainland China shares lose 0.2%
* Australian dollar falls; gold, U.S. bonds gain
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, Feb 18 (Reuters) - Asian shares fell and Wall Street
retreated from record highs on Tuesday after Apple Inc AAPL.O
said it will not meet its revenue guidance for the March quarter
as the coronavirus outbreak slowed production and weakened
demand in China.
The warning from the most valuable company in the United
States sobered investor optimism that economic stimulus by
Beijing and other countries would protect the global economy
from the effects of the epidemic.
S&P500 e-mini futures ESc1 dipped as much as 0.3% in Asian
trade.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 0.65% while Tokyo's Nikkei .N225 slid
1.0%. Shanghai shares .SSEC dipped 0.2%, having gained in nine
of the past 10 sessions largely on hopes for policy support by
Beijing.
China's central bank cut the interest rate on its
medium-term lending on Monday, which is expected to pave the way
for a reduction in the benchmark loan prime rate on Thursday.
But sentiment was shaken when Apple told investors its
manufacturing facilities in China have begun to re-open but are
ramping up more slowly than expected, reinforcing signs of a
broader hit to businesses from the epidemic. "Apple is saying its recovery could be delayed, which could
mean the impact of the virus may go beyond the current quarter,"
said Norihiro Fujito, chief investment strategist at Mitsubishi
UFJ Morgan Stanley Securities.
"If Apple shares were traded cheaply, that might not matter
much. But when they are trading at a record high, investors will
be surely tempted to sell."
Asian tech shares were also hit. Samsung Electronics
005930.KS dropped 2.1%, Taiwan Semiconductor Manufacturing Co
(TSMC) 2330.TW lost 1.7% and Sony 7267.T shed 2.6%.
In China, the number of new Covid-19 cases fell to 1,886 on
Monday from 2,048 the day before. The World Health Organization
cautioned on Monday, however, that "every scenario is still on
the table" in terms of the epidemic's evolution.
As China's authorities try to prevent the spread of the
disease, the economy is paying a heavy price. Some cities
remained in lockdown, streets are deserted, and travel bans and
quarantine orders are in place around the country, preventing
migrant workers from getting back to their jobs.
Many factories have yet to re-open, disrupting supply chains
in China and beyond, as highlighted by Apple.
"Lifting travel restrictions is taking longer than expected.
Initially we thought lockdowns would end in February and factory
output would normalise in March. But that is looking
increasingly difficult," said Ei Kaku, currency strategist at
Nomura Securities.
Nomura downgraded its China first-quarter economic growth
forecast to 3%, half the pace of the fourth quarter, from its
previous forecast of 3.8%, and added there was a risk it could
be even weaker.
Also hurting market sentiment was news that the Trump
administration is considering changing U.S. regulations to allow
it to block shipments of chips to Huawei Technologies HWT.UL
from companies such as Taiwan's TSMC 2330.TW , the world's
largest contract chipmaker. Bonds were in demand, with the 10-year U.S. Treasuries yield
falling 1.0 basis point to 1.578% US10YT=RR after a U.S.
market holiday on Monday.
Safe-haven gold XAU= also rose 0.18% to $1,584.80 per
ounce.
In the currency market, the yen ticked up 0.1% to 109.75 yen
per dollar JPY= while the risk-sensitive Australian dollar
lost 0.4% to $0.6707 AUD=D4 . The yuan was steadier for now,
trading at 6.9866 yuan per dollar CNY=CFXS .
The euro, grappling with worries about sluggish growth in
the euro zone, edged down 0.1% to $1.0836 EUR= , near its
33-month low of $1.0817 touched on Monday.
Oil prices also dipped.
West Texas Intermediate (WTI) crude CLc1 rose as high as
$52.41 per barrel, before giving up gains to be $51.96 per
barrel, down slightly on the day.