Apple set to weigh on Nasdaq amid flat markets before Federal Reserve

Jasper Jolly
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Sales of the iPhone disappointed investors (Source: Getty)

Apple shares are expected to drag on the Nasdaq Composite index after the tech giant reported a surprise fall in sales of its flagship iPhone.

Sales of the smartphone, which generates almost 70 per cent of Apple’s revenues, dipped to 50.8m units in the first quarter in an announcement after the bell.

That could drag on the fortunes of the Nasdaq, which was buoyed to a record high of 6,102.72 by shares in Apple rising before the sales figures were announced.

Read more: Apple sales miss forecasts on surprise drop in iPhone sales

Mihir Kapadia, chief executive of Sun Global Investments, said: “The Nasdaq Composite rose 0.06 per cent to another record high [last night], but may decline at the open today as Apple fell 1.2 per cent in after-hours trading after reporting a surprise fall in iPhone sales in its quarterly update.”

Meanwhile, investors await the Federal Reserve, due to announce monetary policy this evening at 7pm London time.

The US central bank is not expected to make any changes to interest rates, although speculation has mounted that the Federal Open Markets Committee could begin to address issues around the 4.5 trillion balance sheet.

US 10-year Treasury yields remained relatively steady before the announcement. The yield, which moves inversely to prices, on the benchmark government debt remained just below the 2.3 per cent mark, according to Tradeweb.

Sterling remained flat in early afternoon trading, with the pound dipping against the US dollar by 0.1 per cent to around $1.29 but edging up against the euro.

Read more: The pound could break $1.30 today for the first time since September

The pound was unmoved by political wrangling over the size of the so-called Brexit bill facing the UK on leaving the EU.

Many currency analysts believe traders have priced in political risk on the currency, with risks tilted to the upside for sterling against the dollar.

NatWest Markets currency strategist, Paul Robson, said: “We see GBP/USD moving into a slightly higher range between $1.30-1.35 in the coming weeks. While the UK is on course to leave the EU, nothing has yet changed and Europe remains the UK’s largest export market by far.

“We find that UK exports are more sensitive to underlying demand conditions than the exchange rate, so recent better European data and ebbing political risk should be seen as a sterling positive. However, it seems unlikely that the currency returns to its pre-referendum level as the outlook remains uncertain and the economy is set to continue to slow through 2017.”

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