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Apple’s share price fell by 9 per cent on Thursday after it cut its revenue forecasts for the first time in 16 years, blaming poor iPhone sales in China, Financial Times reports.

The sharp reaction puts Apple on track for its biggest one-day share price drop in five years and helped trigger a broader sell-off in US shares as investors fretted about state of the Chinese market and the broader outlook for the global economy.

The tech-heavy Nasdaq Composite was down 2.4 per cent by mid-morning in New York, ending a run of five consecutive sessions of gains. The broader S&P 500 benchmark was 2 per cent lower.

The sharp drop in Apple shares takes the company’s market capitalisation below that of Alphabet, at $686.7bn. The iPhone maker’s valuation had already been overtaken by tech rivals Amazon and Microsoft at the end of last year.

“While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China,” said Tim Cook, Apple’s chief executive, on Wednesday, in a letter explaining why he was cutting the company’s revenue guidance for the fourth quarter. China accounts for around 15 per cent of Apple’s revenues.

Only two months ago Apple said it expected revenue of $89bn-$93bn for the final three months of 2018, the most important period of its fiscal year. That would have represented revenue growth of as much as 5 per cent from the same period the year before.

The company now believes revenues will come in at approximately $84bn, pointing to a decline of 5 per cent instead.

Apple’s guidance cut sent ripples through the global tech sector. In Asia, Foxconn, the main manufacturer of the iPhone, fell 1.7 per cent while smaller suppliers such as AAC Technologies and Sunny Optical dropped 5.4 per cent and 6.7 per cent. UK-based chipmaker Dialog Semiconductor, which is listed in Frankfurt, shed more than 8 per cent.

Samsung, a rival phonemaker, fell 3 per cent, while luxury companies Burberry and Kering, the owner of Gucci and Yves Saint Laurent, both slid around 3 per cent.

The scale of the disappointment for Apple was striking after the company had appeared to rebut some recent suggestions of weakening demand for the iPhone. The company has been dogged in recent weeks by reports of falling orders among its suppliers and questions about the strength of demand for the new, lower-priced iPhone XR.

It also said that “more than 100 per cent” of its revenue decline from the previous year could be attributed to lower Chinese demand for iPhones, Macs and iPads.