July 12, 2000
Dow Jones Newswires
Asian Stocks End Mixed; Hang Seng Overtakes Nikkei
Dow Jones Newswires
HONG KONG -- Asian stock markets stalled again Wednesday to a mixed close, with most barely moving. For true market followers, however, there was one event of note: the Hang Seng Index closed above the Nikkei 225 average.
Hong Kong's Hang Seng rose 1.1% to end the day at 17552.26 points. The Nikkei in Japan slipped 162.23 points to 17342.12. This is only the second time in history the Hang Seng has topped the Nikkei - the first time was just on June 16.
While the two markets, and indexes, are vastly different, and the Tokyo Stock Exchange dwarfs the Hong Kong Stock Exchange, this crossover is of interest.
Think about it: In early 1990, an investor who sold all his Japan holdings and plunked the money into the Hong Kong stock market would have been laughed at.
The Nikkei, while well off its high of 38915.87 points in mid-1989, was still above 34000. The Japanese economy was still perking along, Japanese banks were seen as some of the best in the world, and Japanese industry was heading to world domination in many sectors.
In Hong Kong, however, investors, and residents were still rattled by Beijing's crushing of the 1989 democracy movement. Many people, and companies, were moving assets out of town, and doomsayers warned of dark days ahead when China took over Hong Kong in 1997. The Hang Seng stood at around 2800 points in early 1990.
But a brave contrarian investor who switched to Hang Seng stocks would be up about 700% now, while one who kept money locked in the Nikkei would be down 56%.
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