The market valuation of the United States based tech giant Apple is now greater than the total combined value of all of the firms of the top share index of the United Kingdom.
With a 4 per cent spurt in the share price of Apple on Tuesday, its total market value touched at $2.3 trillion (£1.7tn) which was greater than the market value of all the companies in the FTSE 100 at £1.5tn.
Just two weeks ago, Apple became the first US firm to be valued at $2tn.
With the surge in demand for tech goods amid the novel coronavirus pandemic, investors have been aggressively picking up US tech stocks.
Apple has been one of the major beneficiaries of the new trend of more people depending on technology for working and shopping from the comfort of their homes during the pandemic.
Since March, the share price of the iPhone maker has more than doubled even as stock markets around the world were panic stricken because of the coronavirus pandemic.
It is also being said by analysts that the decision of the company to divide its shares, swapping four new ones for every old one investors held was also responsible for the rise in demand for Apple shares on Tuesday.
And in comparison to the runaway share prices of big US-listed tech firms, the companies listed in London, which also includes oil companies and banks hit severely by the pandemic induced lockdowns, have performed very sluggishly according to market watchers.
“The FTSE 100 is a dinosaur, full of rather lumbering old-world stocks with precious little growth to offer,” said Neil Wilson, chief market analyst for Markets.com. He added that it is also “a very good proxy for the global economy, which we know is on its knees”.
With the exception of Ocado, “there is no tech to speak of, which is where the real money has been made this year,” he added. “Whilst the US has Zoom, we have BT and Vodafone. The US boasts Netflix and Amazon – the FTSE can muster ITV and Sainsbury’s.”
Compared to its high of 7,675 in January, the FTSE 100 is trading at 22 per cent lower value at 5,972 points.
In comparison, a fresh record on Tuesday was hit by the Nasdaq index in the US, which includes many large tech companies. And compared to the collapse in share prices in the immediate aftermath of the coronavirus outbreak, the exchange has since doubled.
All markets – including those that are trading in stocks, bonds and commodities – are currently being overvalued by investors, some investors have warned.
The value of many companies and assets have been boosted by various governments and central banks providing stimulus to support struggling economies which includes including quantitative easing and historic low interest rates.
(Adapted from BBC.com)