fix(select): highlighted option not updated if value is reset while closed

src/material/select/select.spec.ts

@@ -296,6 +296,34 @@ describe('MatSelect', () => {
           flush();
         }));
 
+        it('should go back to first option if value is reset after interacting using the' +
+          'arrow keys on a closed select', fakeAsync(() => {
+            const formControl = fixture.componentInstance.control;
+            const options = fixture.componentInstance.options.toArray();
+
+            expect(formControl.value).toBeFalsy('Expected no initial value.');
+
+            dispatchKeyboardEvent(select, 'keydown', DOWN_ARROW);
+            flush();
+
+            expect(options[0].selected).toBe(true, 'Expected first option to be selected.');
+            expect(formControl.value).toBe(options[0].value,
+                'Expected value from first option to have been set on the model.');
+
+            formControl.reset();
+            fixture.detectChanges();
+
+            expect(options[0].selected).toBe(false, 'Expected first option to be deselected.');
+            expect(formControl.value).toBeFalsy('Expected value to be reset.');
+
+            dispatchKeyboardEvent(select, 'keydown', DOWN_ARROW);
+            flush();
+
+            expect(options[0].selected).toBe(true, 'Expected first option to be selected again.');
+            expect(formControl.value).toBe(options[0].value,
+                'Expected value from first option to have been set on the model again.');
+        }));
+
         it('should select first/last options via the HOME/END keys on a closed select',
           fakeAsync(() => {
             const formControl = fixture.componentInstance.control;

src/material/select/select.ts

@@ -858,6 +858,10 @@ export class MatSelect extends _MatSelectMixinBase implements AfterContentInit,
       // mode, because we don't know what option the user interacted with last.
       if (correspondingOption) {
         this._keyManager.setActiveItem(correspondingOption);
+      } else if (!this.panelOpen) {
+        // Otherwise reset the highlighted option. Note that we only want to do this while
+        // closed, because doing it while open can shift the user's focus unnecessarily.
+        this._keyManager.setActiveItem(-1);
       }
     }