FTSE 100 is worth more than Apple again after it plunged 8%

FTSE 100 is worth more than Apple again after it lost $180bn in biggest one-day drop for US firm to £1.5trillion – as falling tech stocks shrank value of Microsoft, Google and Amazon

  • Apple fell 8% in New York yesterday which valued compmany at £1.55trillion
  • This is slightly below FTSE 100 fell 1.5% to finish at a total value of £1.61trillion 
  • This means iPhone manufacture is now worth slightly less than all 100 UK firms
  • On Tuesday Apple rose above FTSE value but suffered yesterday in a tech sell off

Apple has fallen back below the value of the FTSE 100 as UK investors were caught in the crosshairs of a massive sell-off in technology stocks that rocked US markets.

The California-based company dropped 8 per cent or $10 (£7.52) to close at $120.88 (£90.95) in New York yesterday as traders took their money and ran. This marked a $180billion (£135billion) fall in market value, the largest ever in one day for a US firm.

The dive gave Apple a valuation of $2.07trillion (£1.55trillion) – slightly below the FTSE 100 which finished at £1.61trillion after falling 1.5 per cent, or 90 points, to 5851.

This means the iPhone manufacture is now worth slightly less than all 100 UK firms, which together employ five million people compared to the 137,000 Apple staff. 

It came two days after Apple overtook the entire FTSE 100 value on Tuesday after the manufacturer’s share price surged during the coronavirus pandemic. At that stage it was worth $2.2trillion (£1.65trillion), compared to the FTSE at £1.63trillion. 

Yesterday’s falls took place as shares in other technology giants on Wall Street such as Amazon, Google’s Alphabet and Microsoft also dropped by more than 4 per cent. 

Analysts said there seemed to be no explicit catalyst for the sell-off, with economic data coming in roughly where the market had expected and no companies issuing foreboding warnings – but they suggested the market was just due for a breather. 

Apple dropped 8 per cent or $10 to close at $120.88 in New York yesterday, giving the California-based tech giant a valuation of $2.067trillion (£1.55trillion)

The FTSE 100 index of the UK’s leading companies finished with a market capitalisation value of £1.61trillion yesterday after falling 1.5 per cent, or 90 points, to 5851

Simon French, chief economist for Panmure Gordon, told BBC Radio 4’s Today programme this morning: ‘We need to put those moves into context.

‘Those companies (Apple, Amazon, Alphabet and Microsoft) collectively at the start of September, were up 57 per cent year to date.

‘And that is in contrast to the Dow Jones industrial Average of more traditional US companies which is down 2 per cent on the year.

‘So I think it was a case of investors taking some money off the table for some of these tech stocks, given some very, very sky high valuations and a great run.

‘But also there will also be concerns that tall poppies attract attention from regulators and potentially with a US presidential election coming up in November, and lawmakers questioning whether they have too much market dominance.’

A man wearing a mask walks past a New York Stock Exchange screen in Manhattan yesterday

Trader Neil Catania works on the floor of the New York Stock Exchange last week on August 27

Yesterday’s tumble wiped 5 per cent off the Nasdaq and marked an abrupt halt in a rally over the past few months that has taken the stock markets to record highs.

Before yesterday, Apple had seen its price rise by more than 75 per cent since the start of 2020, while the FTSE 100 had fallen by 23 per cent this year.

Investors have been attracted to Apple’s stock amid hopes it would benefit from high consumer demand in lockdown as people switched to working from home. 

On Tuesday, Apple rose just under 4 per cent after a report that the company had asked suppliers to make at least 75million 5G iPhones for later this year.

The Apple store on Regent Street in London is pictured last month on August 19. The tech giant last month become the first US company to boast a market value of $2trillion

It was also boosted by a four-for-one stock split that made its shares more affordable to more investors, which was first announced five weeks ago.

The company cut each $500 (£375) share into four $125 (£95) shares, saying it did so for a broader base of investors to afford to buy its stock.

Last month Apple, which is the world’s biggest company by market capitalisation, become the first US firm to boast a market value of $2trillion (£1.5trillion).

That milestone came just two years after the firm became the first to reach $1trillion (£0.75trillion).

This year the firm has overcome the shutdown of factories in China that produce the iPhone and the closure of its retail sales amid the Covid-19 crisis.

The Apple Park campus is pictured in Cupertino, California, on October 23 last year

The company has a hugely loyal customer base which continued to buy iPhones and other devices online while stuck at home during the lockdown.

During the pandemic Apple gained about $6.7billion (£5billion) in value every business day – the equivalent of adding a Rolls-Royce every day to its market cap.

Apple reported an 11 per cent increase in quarterly revenue in July with sales up to $59.7billion (£44.8billion), but said its new iPhone 12 had been delayed.

Apple has been at the vanguard of a group of Big Tech companies that are increasingly taking over people’s lives – and the stock market in the US.

Just five companies – Apple, Microsoft, Amazon, Facebook and Google’s parent company – account for nearly 23 per cent of the S&P 500’s entire value.

Customers queue for the launch of the iPhone XR at the Apple Store in Covent Garden in 2018

Saudi Aramco reached a market value of $2trillion shortly after becoming a public company in December 2019, although it has fallen since amid a drop in oil prices.

Apple is said to be preparing to ship 75million new iPhone 12 models this year with the company hoping sales of the next-generation iPhone reach 80million.

The initial figures are in line with previous iPhone launches, suggesting Apple does not think the crisis and economic slowdown are causing consumer interest to wane.

The company is planning to launch four iPhone 12 models later this year with different screen sizes, 5G support and crisp OLED displays.

Apple is also preparing a new iPad Air with an edge-to-edge screen, two new versions of the Apple Watch and a smaller and cheaper HomePod speaker.

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