Indian Shares drop as Apple's warning signals virus impact

Indian shares tracked Asian peers lower on Tuesday, as a revenue warning from tech giant Apple Inc signalled mounting financial fallout on businesses from the coronavirus epidemic in China.

The iPhone maker warned late Monday it was unlikely to meet a sales target set just three weeks ago amid lost production and weakening demand in China, which supplied 18% of the company’s revenue in the year-ago quarter, after the outbreak.

The rapidly spreading virus has killed nearly 1,900 in China and stricken some 72,000 people, confining millions to their homes, disrupting supply chains and delaying reopening of factories after the extended Lunar New Year holiday break.

The broader NSE Nifty 50 index was down 0.7% at 11,964, while the benchmark S&P BSE Sensex dropped 0.5% to 40,832.35, as of 0440 GMT. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1%, while Tokyo’s Nikkei dropped 1.21%.

“If the global supply chain gets impacted, our dependency for various inputs from China will be affected and might take the sheen off certain industries,” said Mayuresh Joshi, analyst with William O’Neil India, adding that Apple’s warning has accentuated the fallout interms of implications of coronavirus.

The blue-chip Nifty 50 dropped 1% so far this year. The index slipped over 3% from its Jan. 20 record intraday high of 12,430.50, weighed down by the impact of the outbreak and as an annual federal budget failed to address key concerns among investors.

Except Nifty Media, all other indices were trading in negative territory, with the Nifty information technology sub index dropping 0.3%.

Shares of TV18 Broadcast rose 19%, while Network18 Media & Investments Ltd advanced 4.9% after Reliance Industries said late Monday it would merge its media and distribution businesses into its TV business, Network18 Media.

Yes Bank, the top loser in Nifty 50 index, dropped as much as 5.5%.

The Nifty Metals index was the top laggard with a decline of 1.5%.

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