Asia’s benchmark stock gauge traded near a seven-year high as technology shares led declines and consumer equities advanced. Shares in Hong Kong slid for the first time in nine days.
Tencent Holdings Ltd. slumped 5.5 percent in Hong Kong after its chairman reduced his stake in the Internet company. Department-store operator Shinsegae Co. surged 11 percent in Seoul after LIG Investment & Securities Co. upgraded the stock. Hong Kong Exchanges & Clearing Ltd. dropped 4 percent from a record after gaining 66 percent in the previous eight sessions.
The MSCI Asia Pacific Index added less than 0.1 percent to 152.71 as of 12:32 p.m. in London, erasing a 0.4 percent gain. Equity benchmarks in Hong Kong, among the world’s biggest advancers this month, dropped at least 1.6 percent today, with the Hang Seng Index falling the most this year. The 14-day Relative Strength Index on the Asian regional index was at 76 Monday, trading for a fourth day above 70, a level taken by traders as a signal stocks are poised to drop.
“The market is building up pressure for profit-taking in the short term as share prices have gone too fast in recent days,” Dai Ming, a fund manager at Hengsheng Asset Management Co., said in Shanghai. “The fund flow from the mainland to Hong Kong could slow a bit.”
Japan’s Topix index gained 0.3 percent. South Korea’s Kospi index added 0.6 percent. New Zealand’s NZX 50 Index gained 0.5 percent, while Australia’s S&P/ASX 200 Index lost 0.2 percent.
Hong Kong’s Hang Seng Index fell 1.6 percent. The measure surged 14 percent over the past eight days, pushing its RSI to 89.4, the highest since 1989. The Hang Seng China Enterprises Index slumped 2.2 percent after closing yesterday at its highest since May 2008.
E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying gauge declined 0.5 percent on Monday. General Electric Co. retreated from a six-year high, leading industrial companies lower while investors awaited this week’s corporate earnings reports.
“This is a positioning led rally as investors are rotating out of the U.S. and into Asia, especially Japan and most recently Hong Kong,” said David Welch, head of equity sales trading at Reorient Group in Hong Kong. “Investors, especially global investors, are still too underweight Hong Kong and China. Any dips will be aggressively bought.”