The Nasdaq 100 Index has initiated a special rebalancing to curb the dominant position of large-cap technology stocks. Meta Platforms (META.US) is the only major stock that has fallen below the critical threshold for down weighting. However, the market believes that Meta is still unlikely to escape the fate of being down weighted.
This rebalancing plan will take effect on July 24th and is expected to reduce the weights of six tech giants—Microsoft (MSFT.US), Apple (AAPL.US), Google’s parent company Alphabet (GOOGL.US), NVIDIA (NVDA.US), Amazon (AMZN.US), and Tesla (TSLA.US)—while increasing the influence of other constituent stocks.
U.S. Stocks
Fundamental Analysis:
U.S. stocks closed higher on Monday, with all three major indices steadily rising throughout the day. The Nasdaq and small-cap stocks led the gains, and most popular tech stocks rose.
Apple rose 1.73%, NVIDIA surged over 2%, and ON Semiconductor climbed over 4%, with all three reaching new closing highs. Tesla rose over 3%, reaching a new phase high.
Chinese concept stocks had mixed performance, as Faraday Future soared over 13%, Li Auto rose over 3%, Vipshop and Full Truck Alliance gained over 1%, while Netease, XPeng Motors, Baidu, and NIO saw slight increases. Tencent Music fell over 2%, while iQiyi, Weibo, and Alibaba dropped over 1%, and JD.com, Bilibili, and Pinduoduo experienced slight declines.
Technical Analysis:
(S&P 500 Index, 1-day chart)
Market Trends:
- Dow Jones Industrial Average rose 76.32 points, or 0.22%, to close at 34,585.35 points.
- Nasdaq Composite Index rose 131.25 points, or 0.93%, to close at 14,244.95 points.
- S&P 500 Index rose 17.37 points, or 0.39%, to close at 4,522.79 points.
Hong Kong Stocks
Fundamental Analysis:
Hong Kong stocks opened lower and continued to decline after being closed due to a typhoon the previous day.
On the market front, heavyweight tech stocks plummeted, with JD.com falling 4.5%, Tencent dropping nearly 4%, Alibaba and Meituan down over 3%, and Xiaomi and Baidu experiencing declines.
Real estate stocks fell across the board, with Longfor Group and Country Garden leading the decline.
Property management and building materials stocks in the industry chain also followed the downward trend. Some automotive stocks rose, and emerging electric vehicle companies “WM Motor” showed strength.
Apple concept stock BYD Electronics bucked the trend, rising over 6%.
Technical Analysis:
(Hang Seng Index, 1-day chart)
Market Trends:
- Hang Seng Index fell 2.17% to close at 18,993.29 points.
- Hang Seng Tech Index fell 2.35%.
- Hang Seng China Enterprises Index fell 2.48%.
FTSE China A50 Index
Fundamental Analysis:
Today, the three major indices of the A-share market opened with mixed gains and losses, but the market weakened after the opening and the ChiNext Index fell by about 0.5%, dropping below the 2,200-point mark again.
The total turnover of the Shanghai and Shenzhen stock markets reached 480.781 billion yuan, with a net sell-off of 7.068 billion yuan by northbound funds. 19 stocks (including ST stocks) hit the limit up, while 2 stocks hit the limit down.
In terms of industry performance, the automotive, commercial retail, agriculture, semiconductor, and decoration materials sectors saw the highest increases, while the culture and media, internet services, photovoltaic equipment, power equipment, and communication equipment sectors experienced the greatest declines.
In terms of themes, the Chiplet concept, chicken meat concept, integrated automotive casting, fourth-generation semiconductors, grain concept, and pork concept were active.
Technical Analysis:
(SSE Composite Index, 1-day chart)
Market Trends:
- Shanghai Composite Index fell 0.35% to close at 3,198.26 points.
- Shenzhen Component Index fell 0.34% to close at 10,972.98 points.
- ChiNext Index fell 0.42% to close at 2,198.21 points.
- STAR 50 Index fell 0.36% to close at 981.23 points.
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