Apple shares tumbled by almost 3 per cent overnight on Thursday, forfeiting almost a whopping $US200 billion ($313 billion) of market value in just two days, as China plans to expand a ban on the use of iPhones to government-backed agencies and state companies.
(US) – Apple’s stock experienced a significant decline, with its market value potentially decreasing by $200 billion in just two days, due to China’s plan to extend the ban on iPhones to government-backed agencies and state-run companies.
The Cupertino-based company’s shares dropped by up to 5.1%, leading to a two-day decline of 6.8%. Apple holds a substantial position in major US equity indexes, contributing to a broader market sell-off influenced partly by a range of issues in China.
Real estate crisis and rising US treasury
China, the world’s second-largest economy, has been facing economic challenges linked to a prolonged crisis in its real estate sector, which has raised concerns about reduced demand for various goods, including consumer electronics and commodities.
China is Apple’s most significant foreign market and a central hub for global production.
Adding to Apple’s woes are rising US Treasury yields resulting from bond sell-offs and concerns that the Federal Reserve will need to intensify its efforts to combat inflation due to the US economy’s resilience.
The impact of this news is rippling across the markets, leading investors to sell a range of assets, from semiconductor stocks to mega-cap technology companies and US-listed Chinese firms.
The Nasdaq 100 Index, heavily weighted with tech companies, declined by approximately 1%, while the Philadelphia Semiconductor Index, consisting of several Apple suppliers, dropped by 2.5% on Thursday.
Bank of America analyst Wamsi Mohan highlighted the interesting timing of the potential ban, particularly in light of Huawei’s recent launch of a high-end 5G-capable smartphone.
The teardown of Huawei’s new device suggests that Beijing is making progress in circumventing US efforts to limit its technological growth.
While some analysts believe that an “iPhone ban” might be overemphasized, given its potential impact on only a fraction of iPhones sold in China, others argue that it could affect various US tech firms relying on sales and production in China.
