Apple leads technology stock recovery

His comments helped claw back $67bn in market capitalisation lost earlier in the day for the world’s most valuable company.

“I get updates on our performance in China every day, including this morning, and I can tell you that we have continued to experience strong growth for our business in China through July and August,” Apple’s chief executive told CNBC in an email.

“Growth in iPhone activations has actually accelerated over the past few weeks, and we have had the best performance of the year for the App Store in China during the last two weeks,” Mr Cook added, in what he admitted was an unusual response to a share-price movement outside of its quarterly earnings reports.

Apple confirmed the remarks, which helped to nudge the company’s share price back above $106 and into positive territory for the day by midday in New York. The stock opened below $100 for the first time since October.

Other tech stocks, including Google, Facebook, Twitter and Netflix also pared their early losses but were nonetheless trading 2-3 per cent lower by lunchtime. Microsoft, which alongside Apple lost about 9 per cent of its value last week as concern mounted about a China-led economic downswing, was down 1 per cent.

This is the second time Mr Cook has tried to calm investor fears about the impact of China’s stock market gyrations. During July’s earnings call, he said that he remained “very bullish on China” and dismissed stock market volatility as a mere “speed bump”. “The stock market participation among Chinese households is fairly narrow,” he noted, constraining the impact on consumer spending.

However, until Monday, investors had seemed unconvinced, sending Apple’s stock price down more than 20 per cent in the past three months.

Apple is betting that expansion of 4G networks in China and the expanding middle class will drive iPhone sales in the world’s largest mobile market. The country accounted for up to 30 per cent of all smartphone sales in the second quarter according to market research group Gartner, which added that Apple is continuing to gain share.

However, Gartner also warned that Chinese smartphone sales fell by 4 per cent, the first such decline in more than a year, as the global market saw its slowest growth since 2013.

Even bullish Wall Street analysts have conceded that the Chinese opportunity for Apple may be smaller than it had once hoped.

In a note to clients on Monday, analysts at FBR, who rate the stock “outperform”, conceded it had been a “miserable, dark period for Apple investors” since July’s results, with fears over slowing iPhone growth “running rampant”.


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