Market heavyweights dip ahead of Nasdaq 100 rebalance
SHARES of Apple, Microsoft and other heavyweight companies dipped on Monday (Jul 10)after Nasdaq said it would rebalance its Nasdaq 100 index to address the benchmark’s “overconcentration”.
Apple dropped 1.1 per cent, leaving its market capitalisation at US$2.967 trillion. It closed above the US$3 trillion threshold for the first time on Jun 30. Alphabet and Amazon fell over 2 per cent, while Microsoft and Tesla each slid more than 1 per cent.
Wall Street’s most valuable stocks declined after Nasdaq said late on Friday it would carry out a “Special Rebalance” of the index to “address overconcentration in the index by redistributing the weights”.
The adjustment will be based on shares outstanding as of Jul 3, with changes announced on Jul 14 and taking effect before the market opens on Jul 24.
The Nasdaq 100 includes 100 of the largest companies that trade on the Nasdaq exchange, and changes to the index will force investment funds that track it to adjust their portfolios and sell shares of companies that have their weight in the index reduced.
Wall Street’s most valuable companies have been among the biggest winners in the US stock market’s recovery this year, further increasing their weight in the Nasdaq 100, and also in the Nasdaq Composite and S&P 500.
While the S&P 500 has gained 15 per cent year to date, Nvidia has surged 189 per cent and Tesla has more than doubled. Microsoft, Amazon and Apple have climbed between 38 per cent and 51 per cent in 2023. REUTERS
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