Mega-cap tech stocks may be left out again
MAINLAND CHINA & HONG KONG
Hong Kong’s benchmark index may not get more technology shares in its quarterly review as China’s regulatory clampdowns roil the sector.
JD.com Inc (9618 HK), NetEase Inc (9999 HK), and other mega-cap tech firms that missed out in previous reviews could be left behind again when Hang Seng Indexes Co Ltd unveils a reshuffle of the local bourse on Friday (19 November). The stock market fallout from Beijing’s crackdowns could keep some tech giants from entering the Hang Seng Index, even as its compiler strives to reinvent a gauge that is filled with financial and property shares.
The Hang Seng Index lags most global peers this year with a 7% decline as China tightens controls over broad swathes of its economy. The Hang Seng Tech Index, which tracks China’s biggest tech companies, has shed 23%, though it has recovered some ground this quarter.
In March, Hang Seng Indexes announced its biggest ever overhaul to boost the number of index members to 80 from 52 by mid-2022, and add more New Economy shares. – Bloomberg News.
On Thursday, the Hang Seng Index tumbled 1.29% to 25,319.72 while the Shanghai Composite Index fell 0.47% to 3,520.71.
REST OF ASIA
Factory gate prices in South Korea rose at the fastest pace since 2008 last month, fuelling inflation concerns and adding to reasons for the central bank to raise interest rates next week.
The governor has sent strong signals that the BOK will consider its second hike of the pandemic on 25 November. While the August lift off in rates was driven by asset bubble concerns, inflation is increasingly becoming a key consideration.
The surge in producer prices along with imported inflation add pressure on firms to pass on higher cost to consumers to avoid profit squeezes. That suggests consumer price inflation, which is already at an almost decade high, will remain elevated or accelerate further. – Bloomberg News.
South Korea’s Kospi Index opened 0.45% higher at 2,969.06. It fell 0.23% to 2,955.63 the previous session.
Australia’s S&P/ASX 200 Index rose 0.33% to 7,403.50 on Friday morning, adding to Thursday’s 0.13% gain to 7,379.20.
The Taiwan Stock Exchange Weighted Index rose 0.44% to 17,841.37.
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