India Was Impacted the Least by the Asia Mayhem


May. 6 2019, Published 9:22 a.m. ET

Down but not out

The S&P BSE Sensex, an index with 30 large cap constituents, fell 0.93% on May 6 to 38,600, while the Nifty 50 fell 0.97% to 11,598.25. Barring the three Ts—technology, tobacco, and telecom—the other sectors ended in the red.

The broader sectoral indices for consumer durables and metals fell more than 2%. The banking sector also underperformed the SENSEX and the Nifty 50.

Despite the fall, India remained the best-performing market, or least impacted, in the Asia-Pacific region on May 6.

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Impact on ETFs

With a higher allocation to losing financials, the iShares India 50 ETF (INDY) is expected to be the biggest loss among the three biggest India-focused ETFs.

The WisdomTree India Earnings Fund (EPI) and the iShares MSCI India ETF (INDA) might see their technology and energy sector holdings coming to the rescue and limiting the fall.

Other Asia-focused ETFs

The iShares S&P Asia ETF (AIA), one of the best-performing Asia ETFs in 2019, will likely be under pressure due to over 50% of its holdings coming from China and Hong Kong.

Due to the market holiday in Japan, the Vanguard FTSE Pacific ETF’s (VPL) losses might be marginal. The ETF focuses on developed markets in the  Asia-Pacific region with 58% holdings in Japanese equities.

Other markets

On May 6, the Australian S&P/ASX 200 closed at 6,283.70—a fall by 82 basis points. The fall will likely have a direct impact on the iShares MSCI Australia ETF’s (EWA) performance, which mainly invests in Australia.

The TSEC Weighted Index, Taiwan’s stock index, closed 1.8% down at 10,897.12 on May 6. The iShares MSCI Taiwan ETF (EWT) invests in Taiwan companies that are part of the index. The ETF is expected open in the red.

The Jakarta Composite, the main index in Indonesia, fell by 1 percentage point. The iShares MSCI Indonesia ETF (EIDO) is expected to follow suit.

The markets in Japan and South Korea were closed on May 6 due to holidays. The markets are expected to respond to the trade war news when they open on May 7.

CAC in France and DAX in Germany both fell ~2% at 7:00 AM EST when this article went to publish.


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