“688 Rally” Continues Despite Pressure From MSCI’s Index Rebalance

Key News

Asia ended a tough August lower overnight, though Japan, Singapore, and South Korea managed to trade higher.

Volumes were very high as MSCI’s
MSCI
index rebalance required passive index and ETF managers to implement the new refreshed index at today’s close. MSCI USA will be nearly 70% of the developed market’s market cap and 61% of All Country World’s market cap, while China is 29% of MSCI Emerging Markets. While the number of Chinese stocks will increase, the weight of China is down due to the market’s decline, thus pressuring Chinese stocks today.