Even luxury goods makers like Apple, BMW , Daimler not immune to yuan swings

Fears of affluent Chinese reducing consumption of now costlier imported goods are likely to impact sales of such luxury goods; Apple loses $24.5 billion in market capitalisation.

The decision of the People's Bank of China (PBoC) to devalue the yuan against the dollar, though aimed at giving a boost to the sagging domestic economy through cheaper exports, has turned out to be a dampener for global luxury goods players.

Globally, investors are dumping stocks of luxury goods makers such as Apple, BMW , Daimler, Hugo Boss, Louis Vuitton, and Swatch which have sizeable revenue contribution from the Chinese market. Nearly $33 billion of market capitalisation has been wiped off from the luxury goods makers' stocks in the two days since PBoC's decision on Tuesday to weaken the yuan against the dollar.

Affluent Chinese buyers have emerged as prominent consumers of luxury products over the past decade.They are the world's fifth-largest buyers of luxury goods. Investors are reassessing the propensity of these consumers after they have faced twin blows in a short span of time. One, the Chinese equity market lost $ 4 trillion, or a quarter of the market capitalization, since the middle of June 2015, thereby eroding wealth of the Chinese investors substantially .Second, the yuan devaluation will make luxury goods dearer. In addition, Chinese consumers now do more than half of their spending abroad. This means, the weaker yuan will impact their purchasing power in these overseas markets, thus magnifying the adverse impact on sales of luxury goods players.

Apple Inc was the biggest loser on bourses suffering an erosion of $24.5 billion in market cap. The company derives nearly 27% of sales from Greater China which is one of the fastest-growing markets. The secondbiggest loser was Daimler, which derives nearly 10% of its sales from China. The manufacturer of Mercedes lost $3 billion of market capitalisation.

Tata Motors, India's truck and passenger car maker, too lost nearly $1 billion in market cap.The company's UK subsidiary JLR counts China as a major market for its premium cars brands -Jaguar and Land Rover.