Australia

Australian shares are set to follow Wall Street lower as weak US factory data and a revenue warning from tech giant Apple stokes fears of a global economic slowdown.

The SPI200 futures contract was down 36 points, or 0.65 per cent, at 5,541.0, at 8am Sydney time on Friday, hinting at an early slide for the benchmark ASX/200.

Yesterday, the ASX surged ahead with gains across all the major sectors. The benchmark S&P/ASX200 index closed up 75.6 points, or 1.36 per cent, to 5,633.4 at 4.15pm Sydney time on Thursday, led by energy stocks on the backs of higher oil prices.

Overnight, technology shares led a selloff across global markets after weaker iPhone sales in China saw Apple cut its revenue forecast for the first time in nearly 12 years.

At the close, the Dow Jones Industrial Average fell 660.02 points, or 2.83 per cent, to 22,686.22, the S&P 500 lost 62.14 points, or 2.48 per cent, to 2447.89 and the Nasdaq Composite dropped 202.43 points, or 3.04 per cent, to 6463.50.

Oil prices are slightly higher on signs that Saudi Arabia is cutting crude output, but are also being pressured by concerns that slowing global economic growth.

Market volatility has seen copper hit an 18-month low, while safe-haven gold is soaring at its highest in seven months.

Meanwhile, the local dollar has climbed back above 70 US cents after a dramatic flash crash dominated Thursday's currency headlines.

The Aussie is currently buying 70.02 US cents from 69.42 US cents on Thursday.

ASIA

MSCI's broadest gauge of Asia-Pacific shares outside Japan fell 0.5 per cent after an attempt in Asian hours at a bounce. Japanese markets were closed for holidays but Nikkei futures dropped 1.8 per cent.

Shares in China and Hong Kong see-sawed between gains and losses as investors waited for Beijing to roll out fresh support measures for the cooling Chinese economy.

The Hang Seng index edged down 0.3 per cent to 25,064.36, while the Hang Seng China Enterprises index closed flat.

The struggling market mostly followed trading in mainland China, where the Shanghai Composite index ended flat but the blue-chip CSI300 index and most of its sub-indexes fell.

EUROPE

Major European bourses opened firmly in negative territory - Frankfurt's DAX, with its exposure to Chinese trade and tech-heavy constituents, was the biggest faller down as much as 0.8 per cent, while Paris' CAC40 dropped 0.7 and London eased 0.2 per cent.

Chipmakers who supply parts to Apple were the worst hit. Shares in AMS, which provides the facial recognition sensors used in the latest iPhones, fell 19.4 per cent to the bottom of the STOXX.

Amid the flight to perceived safety, German government bond yields held close to their lowest in over two years. Germany's 10-year bond yield was most recently at 0.169 per cent, from a low of 0.148 per cent on the day.

NORTH AMERICA

Wall Street has sunk 2 per cent as weak US factory data and the fallout of a rare sales warning from Apple fanned fears of slowing growth and spurred the latest leg of a selloff that has sent indexes to their lowest since mid-2017.

Apple's shares have slumped 10 per cent after the company slashed its holiday-quarter revenue forecast, saying sales in China slowed more than expected, the first major warning with the US earnings season around the corner.

Meanwhile, Institute of Supply Management data showed US manufacturing activity slowed more than expected in December, with the index of national factory activity dropping to 54.1 last month and missing economists' estimate of 57.9.

That comes after data earlier this week showed a deceleration in factory activity in China and the eurozone, indicating the ongoing US-China trade dispute was taking a toll on global manufacturing.

Ten of the 11 major S&P sectors fell on Thursday, led by the technology index's 4.16 per cent slide.

Within tech, chipmakers, which count both Apple and China as major customers, were hit the hardest. Twenty-nine of 30 chipmakers in the Philadelphia Semi index fell, with Qorvo, Skyworks and Broadcom each off at least 8 per cent

The Philadelphia Semiconductor index slumped 4.36 per cent.

The trade-sensitive industrials dropped 2.75 per cent, while materials fell 2.39 per cent and three other sectors were logging declines of roughly 2 per cent.

Major car makers reported weak US new car sales in December, with Ford Motor Co and General Motors Co reporting sales falling by 8.8 per cent and 2.7 per cent, respectively. Ford shares fell 1.5 per cent, while GM dropped 4.1 per cent.

The Dow Jones Industrial Average fell 660.02 points, or 2.83 per cent, to 22,686.22, the S&P 500 lost 62.14 points, or 2.48 per cent, to 2,447.89 and the Nasdaq Composite dropped 202.43 points, or 3.04 per cent, to 6,463.50.

The grim reading rocked financial markets, sending investors to the relative safety of government Treasuries and bond-proxies stock sectors.

Even among them only real estate gained, while utilities and consumer staples nursed slight losses.

While the recent selloff has made stocks cheaper, with the S&P 500's valuation falling to 14 times expected earnings from 18 times a year earlier, earnings estimates have also been cut sharply.

Analysts on average expect earnings per share at S&P 500 companies to rise nearly 7 per cent this year, down from a 10 per cent forecast at the start of October and far below their expectations of 24 per cent EPS growth for 2018, according to Refinitiv's IBES.

Among the few bright spots was Celgene Corp, which surged 25.8 per cent after Bristol-Myers offered to buy the drugmaker for about $US74 billion in cash and stock. Bristol-Myers fell 12.5 per cent.

Earlier the market got a short-lived boost from an ADP National Employment Report that showed US private sector jobs rose far more than expected in December.

The more comprehensive nonfarm payroll report on Friday will give a clearer picture of labour market strength.