Hang Seng follows China
Yesterday, Chinese Indexes and Hong Kong’s Hang Seng diverged with the former posting losses and the later rising marginally. However, the Hang Seng followed Chinese Indexes today. The index opened lower today than yesterday’s closing price and dropped further to end 1.58% lower at 27,267.13.
Yesterday, the iShares MSCI Hong Kong ETF (EWH) gained 0.52%, outperforming the Hang Seng Index. The ETF was down 0.2% in pre-market trading today at 7:15 AM EST. With the Hang Seng under pressure, expect the ETF to drop further today.
Nikkei 225 Falls
Japan’s Nikkei 225 lost 0.62% today as 2,164 shares dropped and 1,313 shares gained on the Tokyo Stock Exchange. The transportation sector was under pressure today, and so was Softbank Holdings. The broader TOPIX Index closed 0.36% lower today.
On the economic front, flash manufacturing PMI numbers were released for May today. The PMI dropped to 49.6 in May compared to 50.2 in April. A PMI below 50 indicates contraction. Most of the components of the PMI decreased in May except for employment and prices. Output and new orders continued to decrease for the fifth consecutive month. Businesses expressed a gloomy view about the future.
Yesterday, the iShares MSCI Japan ETF (EWJ) dropped 0.82%, underperforming Japanese indexes. The JPMorgan BetaBuilders Japan ETF (BBJP) dropped 0.76% on May 22, while the WindomTree Japan Hedged Equity ETF (DXJ) was the biggest loser among the three with a 0.9% fall.