Asian markets mixed but tech firms go down

Technology firms took a hit in Asia on Tuesday as two of the biggest names in the sector posted disappointing earnings, dampening sentiment on markets in the region.

A below-forecast reading on Chinese factory activity added to the downbeat mood, though a weak US inflation print reinforced expectations the Federal Reserve will keep well away from lifting interest rates any time soon.

While corporate results have broadly beaten expectations so far, nagging concerns about the outlook for the global economy are keeping investors on edge, preventing them from extending what has been a stellar start to the year for equities.

There were losses across asset classes, with energy firms stung by a recent sell-off in oil prices, which are well down from the six-month highs touched last week.

But tech companies suffered a sell-off after Google parent Alphabet reported a 29 per cent drop in quarterly earnings on slower-than-expected revenue growth. The reading sent its shares plunging more than seven percent in New York after-hours trade.

That was followed Tuesday morning by smartphone and chip titan Samsung Electronics saying that operating profit dived a worse-than-expected 60.2 per cent in January-March as sales also tumbled.

The firm's shares sank 0.7 per cent, while in Hong Kong heavyweight Tencent shed by the same amount and ZTE collapsed more than three percent. Taipei-listed Foxconn and LG Display in Seoul also sank.

Trade talks back in view
The release of Apple's results later in the day will be nervously watched by the market with some observers suggesting a weak reading could spark more heavy selling.

Regional stock markets were mixed with Hong Kong losing 0.7 per cent, Seoul down 0.6 per cent, Sydney off 0.5 per cent, Singapore losing 0.3 per cent and Mumbai 0.5 per cent off.

However, Shanghai ended up 0.5 per cent after three days of heavy losses, while Wellington, Taipei, Jakarta and Manila also gained.

Bargain buying in China helped offset data showing activity in the country's factories barely grew last month, indicating the world's number two economy continues to struggle. The reading comes after a surprise jump last month that had fuelled hopes of stabilisation.

"Today's... data suggest the strong pace of March activity is unlikely to continue," Michelle Lam, a greater China economist at Societe Generale SA, told Bloomberg News.

"Nevertheless, activity has at least gained more traction compared to the turn of the year. The feed-through of tax cuts should put the economy on a stable footing going forward."

Eyes turn to Beijing this week with top negotiators from the US in the capital for another round of talks with their Chinese counterparts to end their debilitating trade row, with expectations a deal will eventually be done.

OANDA senior market analyst Edward Moya said the agreement could be signed off by Donald Trump and Xi Jinping as early as next month if Treasury Secretary Mnuchin and US Trade Representative Lighthizer flag progress on a number of issues including intellectual property and forced technology transfer.

Mnuchin said there was "a strong desire from both sides to see if we can wrap this up or move on", adding he was hopeful for something to report after the next two rounds of meetings.

Also in the pipeline this week is the Fed's latest policy meeting, with hopes for some forward guidance on its rates plans. A below-par inflation reading Monday makes it unlikely the bank will hike before the end of the year.

In early trade London fell 0.1 per cent, while Paris was off 0.4 per cent and Frankfurt dropped 0.2 per cent.