China Markets

Chinese tech sector falls after Tim Cook says China is slowing

Key Points
  • Tech-heavy mainland Chinese indexes declined on Thursday after Apple CEO Tim Cook commented on the country's economy.
  • Apple moved to cut its revenue guidance for the first quarter on Wednesday, blaming it on a variety of factors such as a weakening economy in China and lower-than-expected iPhone revenue.
  • Shares of Apple suppliers in Asia saw declines on Thursday on the back of Apple's announcement.
Analyst: Most of Apple's big problems are 'temporary'
Analyst: Most of Apple's big problems are 'temporary'

Apple CEO Tim Cook told CNBC on Wednesday that he believed the ongoing trade tensions between the U.S. and China "put additional pressure" on Asia's largest economy.

Hours after the publication of those comments, China's overall tech sector fell slightly and shares of some Apple suppliers dove during Thursday's mid-morning Asian trading.

China's tech-heavy Chinext composite fell about 1 percent to close at around 1,487.30. The Shenzhen composite ended its trading day lower by 0.798 percent at approximately 1,246.37 while the Shenzhen component saw losses of 0.837 percent to close at about 7,089.44. Because of their composition, the Shenzhen indexes are closely watched as indicators of Chinese tech shares.

The Chinese stock markets are heavily influenced by retail investors, who are thought to be driven more by short-term sentiment than institutional investors. Recent economic data from China has pointed to a slowing economy, with the country's manufacturing sector shrinking in December.

Cook's Wednesday comments came as Apple moved to cut its revenue guidance for the first quarter.

The tech giant blamed a variety of factors for the lowered guidance, including a weakening economy in China and lower-than-expected iPhone revenue. Apple said the lower-than-anticipated revenue happened "primarily in Greater China," but also said that upgrades to new iPhone models in other countries were "not as strong as we thought they would be."

"If you look at our results, our shortfall is over 100 percent from iPhone and it's primarily in greater China," Cook told CNBC's Josh Lipton in a Wednesday interview. "It's clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy."

Apple suppliers in Asia fall

Shares of some Apple suppliers in Asia saw significant declines on the back of Apple's announcement.

In Shenzhen, assembler Luxshare fell 4.88 percent and Suzhou Dongshan plunged almost 10 percent. Hong Kong-listed shares of Chinese Apple suppliers also took a hit, with lens manufacturer Sunny Optical declining by 6.76 percent and acoustic components supplier AAC Technologies dropping 5.41 percent.

In Taiwan, major contract manufacturer Hon Hai Precision, better known as Foxconn, fell 1.7 percent while Pegatron declined by 1.2 percent.

Over in South Korea, shares of industry heavyweight Samsung Electronics declined by 2.97 percent and chipmaker SK Hynix fell 4.79 percent.

— CNBC's Steve Kovach and Evelyn Cheng contributed to this report.