Asia Stocks Set to Snap the Longest Monthly Rally in a DecadeBy
The “sell in May” theory has finally happened ... in September. After eight straight months of gains, the longest rally since 2007, Asia’s benchmark stock index is on track to post a decline this month.
The MSCI Asia Pacific Index wiped out gains from earlier in September in the past week, as it heads towards its first weekly loss in seven. It has declined around 2 percent since Sept. 20, when the 14-day relative strength of the gauge rose above 70, a level often seen as overbought, for the first time in about six weeks.
Asian stocks have been pressured by increased tensions between the U.S. and North Korea, a disappointing iPhone 8 launch, and a stronger dollar as the Federal Reserve made hawkish policy pronouncements this month. Even so, the benchmark index is still up 19 percent this year, on target for its biggest advance in five years.
Hon Hai Precision Industry Co. and Taiwan Semiconductor Manufacturing Co. were among the biggest drags on the MSCI Asia Pacific Index amid Apple Inc.’s product launch, while China’s big banks declined as investors locked in profits from the stocks’ rally since early July.