HANG SENG INDEX (^HSI)
- Bloomberg
Asian Stocks Steady After U.S. Drop; Bonds Slip: Markets Wrap
(Bloomberg) -- Asian stocks were steady Wednesday after an overnight retreat on Wall Street amid concerns about excessive investor optimism. Treasury yields edged higher.Shares outperformed in Australia, where data showed the economy maintained its rapid recovery in the final three months of 2020. Stocks fluctuated in Japan but rose in Hong Kong and China. S&P 500 and Nasdaq 100 futures climbed after tech shares led losses in the benchmarks. The dollar was little changed.Treasury yields had retreated Tuesday amid comments from Federal Reserve Governor Lael Brainard that bond-market volatility may further delay any pullback in the central bank’s asset purchases.Investors are focusing closely on valuations after the stimulus-fueled run up in risk assets. China’s top banking regulator warned Tuesday about the need to reduce leverage as well as the risk of bubbles in global markets. Bullishness among Wall Street strategists is approaching levels that have presaged potential trouble for stocks, according to a Bank of America gauge.“We believe we’re still very much in a bull market, but certain pullbacks like the one we’ve seen since the beginning of this year are very natural and sometimes needed,” Katerina Simonetti, Morgan Stanley Private Wealth Management senior vice president, told Bloomberg TV. “If interest rates start moving higher and quicker than expected, then there’s a chance there might be more significant pullback in the market.”Elsewhere, oil held below $60 a barrel with the OPEC+ alliance said to be set to agree to a production boost later this week. Bitcoin fluctuated below $50,000.There are some key events to watch this week:U.S. Federal Reserve Beige Book is due Wednesday.OPEC+ meeting on output Thursday.U.S. factory orders, initial jobless claims and durable goods orders are due Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.These are some of the main moves in markets:StocksS&P 500 futures rose 0.3% as of 10:53 a.m. in Tokyo. The S&P 500 fell 0.8%.Japan’s Topix index was flat.Australia’s S&P/ASX 200 index rose 0.6%.South Korea’s Kospi index added 0.2%.Hong Kong’s Hang Seng Index rose 1.1%.Shanghai Composite added 0.7%.CurrenciesThe yen was at 106.81 per dollar.The offshore yuan traded at 6.4683 per dollar.The Bloomberg Dollar Spot Index was flat.The euro was at $1.2092.The Aussie rose 0.2% to 78.32 U.S. cents.BondsThe yield on 10-year Treasuries rose about two basis points to 1.41%.Australia’s 10-year bond yield fell three basis point to 1.69%.CommoditiesWest Texas Intermediate crude was at $59.76 a barrel.Gold shed 0.3% to reach $1,734.10 an ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
- Bloomberg
Tech Leads Stock Losses Amid Valuation Warnings: Markets Wrap
(Bloomberg) -- U.S. stocks dropped after the biggest rally in nine months spurred speculation about excessive investor optimism. Treasuries stabilized, following a recent spike in yields. The dollar retreated.Technology shares led losses in the S&P 500 as Apple Inc. and Tesla Inc. dragged down the Nasdaq 100 -- with the electric-car maker tumbling more than 4%. Target Corp. sank on an underwhelming profitability outlook. Rocket Cos., a Detroit-based holding company, soared after a news report that the stock could become a Reddit target for its high short-interest.Bullishness among Wall Street strategists is near levels that have presaged potential trouble for stocks, according to a Bank of America Corp. gauge. The measure assesses the average recommended allocation to equities and is close to triggering a sell signal. A valuation methodology, sometimes called Fed model that compares corporate profits to bond rates, recently showed stocks were losing their edge. Earlier Tuesday, China’s top banking regulator said he was “very worried” about risks from bubbles in global financial markets.For Bill Northey, senior investment director at U.S. Bank Wealth Management, rising rates are seen as an important element of what’s “giving investors pause at this point in time.” He also noted that they’re relevant when it comes to figuring out the appropriate level of valuations against the stream of corporate earnings.“Did we come too far, too fast in pricing in a strong economy and corporate earnings recovery?” he said.An almost year-long surge in U.S. stocks is due for a pause about now, according to Ryan Detrick, chief market strategist at LPL Financial LLC. “History would say be open to some type of weakness or consolidation,” he said in a blog post Friday. Detrick cited the S&P 500’s performance after bull markets that began in 1982 and 2009, the two fastest starters before the current advance. Both rallies faltered near the one-year mark, and the S&P 500 was little changed to lower six months later.There are some key events to watch this week:U.S. Federal Reserve Beige Book is due Wednesday.OPEC+ meeting on output Thursday.U.S. factory orders, initial jobless claims and durable goods orders are due Thursday.The February U.S. employment report on Friday will provide an update on the speed and direction of the nation’s labor market recovery.These are some of the main moves in markets:StocksThe S&P 500 fell 0.8% at 4 p.m. New York time.The Stoxx Europe 600 Index increased 0.2%.The MSCI Asia Pacific Index declined 0.4%.The MSCI Emerging Market Index decreased 0.1%.CurrenciesThe Bloomberg Dollar Spot Index decreased 0.3%.The euro gained 0.3% to $1.2089.The Japanese yen was unchanged at 106.76 per dollar.BondsThe yield on 10-year Treasuries fell one basis point to 1.41%.Germany’s 10-year yield dipped two basis points to -0.35%.Britain’s 10-year yield decreased seven basis points to 0.687%.CommoditiesWest Texas Intermediate crude fell 1.6% to $59.65 a barrel.Gold rose 0.5% to $1,733.71 an ounce.Silver added 0.5% to $26.71 per ounce.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
- Bloomberg
Hang Seng to Boost Index Members to 80 in Biggest Makeover
(Bloomberg) -- Hang Seng Indexes Co. will boost the members of its Hong Kong stock benchmark to 80 and cap the weighting of any one company as it implements the biggest changes to the gauge’s 51-year-old history, in a bid to embrace the new economy.The wide-ranging overhauls to the Hang Seng Index include increasing the number of constituents from 52 and limit a stock’s weighting to 8%, the firm said in a statement on Monday. The revamp also shortens the listing history requirement for a company to be included into the gauge. Implementation of the changes will begin as early as its May index review and go through mid-2022.The HSI, which in 2020 lagged global peers by the most in decades, has been moving away from being filled with financial and property stocks in recent years at a time when China’s tech giants hold growing sway. In 2019, the information technology sector overtook financials as the index’s largest industry by market value, according to a December consultation paper detailing proposed changes to the benchmark.The new weighting limit of 8%, down from a maximum of 10%, will apply to all members and will also be applied to the Hang Seng China Enterprises Index, effective from the index rebalancing in June. The benchmark currently caps secondary listings or shares with unequal voting rights at 5%.“This is expected to help reduce the volatility of the HSI,” said Jingyi Pan, a market strategist at IG Asia in Singapore. “Immediately, those above 8% in terms of weighting - Tencent, AIA, HSBC - comes to mind with selling pressure expected under the changes.”The announcement follows a record buying frenzy from mainland traders that sent the stock gauge past the 30,000 point level in January for the first time since May 2019, led by heavyweights like Tencent Holdings Ltd. and Hong Kong Exchanges & Clearing Ltd.READ: Alibaba Among Stocks to Benefit From HSI Reform: Street WrapThe Asian financial hub has become a preferred venue the past several years for a wave of Chinese megacaps to sell shares. Kuaishou Technology, backed by Tencent, surged 161% on its debut last month in the world’s biggest internet initial public offering since Uber Technologies Inc. The HSI revamp will also shorten the listing history requirement to three months for new companies effective May.In addition, Hang Seng Indexes will ensure 20 to 25 of constituents in the benchmark are classified as Hong Kong firms, a number that will be evaluated every two years. The proportion of mainland companies in the index by market value was 79% in 2020, it said in December’s paper.On Friday, the company said it would add Alibaba Health Information Technology Ltd., Haidilao International Holding Ltd. and Longfor Group Holdings Ltd., expanding the benchmark to 55 members from 52 effective March 15.(Changes first two paragraphs, adds quote. A previous version of this story corrected month of Kuaishou’s debut in second last paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
