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Hang Seng Follows Mainland’s Lead, Japanese Indexes Gain

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Hang Seng recovers

Hong Kong’s Hang Seng Index, which fell 1.5% on May 14, ended up gaining 0.52% on May 15 to end up at 28,268.71. The index followed the SSE Composite Index’s lead.

After losing 2.92% on May 13, the iShares MSCI Hong Kong ETF (EWH) recovered yesterday. The ETF gained 1.24% yesterday, outperforming the Hang Seng Index as well as the US indexes. We expect the ETF to post moderate gains today in the absence of any negative news.

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Nikkei’s gains

Japan’s Nikkei 225 almost nullified its 0.59% loss on May 14 with a 0.58% gain on May 15. The index opened higher but dropped during early trading. The market then turned around with the expectation that China would roll out a stimulus to turbocharge its slowing economy. The index closed at 21,188.56.

The broader Tokyo Stock Price Index gained 0.6% on May 15 to end the day at 1,544.15.

On May 14, the iShares MSCI Japan ETF (EWJ), which invests in Nikkei 225 companies, gained 1.4% against the Nikkei’s 0.59% loss. The ETF also outperformed the US indexes. The WisdomTree Japan Hedged Equity ETF (DXJ) gained 1.67%. The Vanguard FTSE Pacific Index ETF (VPL) rose 1.09% yesterday.

The JPMorgan BetaBuilders Japan ETF (BBJP), which invests in 382 companies that are part of the Nikkei 225 and the Tokyo Stock Price Index, gained 1.51% on May 14.

Most of these ETFs performed as we’d expected. With the Japanese market in positive territory, these ETFs may give marginally positive returns today.

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