Shares in luxury retailers have plunged after Apple blamed a Chinese economic slowdown for its worse than expected sales performance.
The tech giant said lower demand for its products in China and the country’s economic deceleration were to blame for its second revenue warning last night.
Luxury retailers have subsequently suffered as analysts said investors were concerned Chinese consumers may lose their appetite for high-end brands.
Burberry shares fell more than five per cent – the biggest faller on the FTSE 100.
Shares in Mulberry dropped 3.5 per cent, LVMH slid 2.8 per cent and French luxury goods manufacturer Hermes also fell 2.9 per cent.
As the US markets opened today and all three major indices continued to slide, Ralph Lauren fell 3.2 per cent and Tiffany & Co dropped 4.2 per cent.
“Investors are fearful the Chinese middle class might lose their appetite for Western luxury brands,” CMC Markets analyst David Madden said.
AJ Bell analyst Russ Mould said mining firms and other companies “reliant on Chinese consumption” were hit this morning by Apple’s warning.
In an open letter to investors late last night, Apple chief executive Tim Cook cut the company’s quarterly sales target blaming weak iPhone sales in China and fewer customers upgrading their iPhones.
Cook said Apple is anticipating revenue for the last three months of 2018, often deemed the most profitable time in retail thanks to Christmas and other gift-giving holidays, to be around $84bn (£66.8bn).
This is down five per cent from the same period in 2017, and $9bn lower than Apple's original forecast for the quarter.
Sparking fears of a potential worsening of the US-China trade dispute, major European stocks have fallen today, with the FTSE 100 slipping 0.4 per cent.
The German Dax has fallen 1.25 per cent and France’s CAC has slid 1.1 per cent.