Shanghai Stock Exchange launches new STAR Market index

China's Shanghai Stock Exchange (SSE) on Tuesday launched the SSE STAR 200 Index to track the performance of companies listed on the STAR market, China's Nasdaq-style sci-tech innovation board.

The SSE STAR 200 Index selects 200 STAR market securities with small-scale market capitalization and good liquidity as index samples. Three other indexes -- the SSE STAR Earnings Quality Strategy Index, the SSE STAR Brand Name Drug Index and the SSE STAR Value 50 Strategy Custom Index -- are scheduled to be unveiled on Friday.

The Earnings Quality Strategy Index measures the performance of securities of listed companies with high earnings quality, the Brand Name Drug Index measures the performance of representative companies in the brand name drug industry, and the Value 50 Strategy Custom Index selects 50 securities with lower operating risks and valuation to measure the performance listed companies with value characteristics, according to the SSE.

Following the release of these four indexes, the STAR market will have 24 indexes tracking domestic and foreign financial products worth a combined total of nearly 160 billion yuan (about 22.4 billion U.S. dollars).

The STAR 50 Index, the STAR 100 Index and the STAR 200 Index will jointly form the market's scale-based index series, reflecting the overall performance of securities from listed companies with varying scales of market capitalization, said the SSE.

"The variety of sci-tech innovation board indexes has been constantly enriched, which can more accurately track the performance of more STAR stocks, especially stocks related to specific market segments considered as the 'new quality productive forces'. At the same time, it provides a feasible way to accommodate the diversified demands of various investors. In the long run, the injection of long-term funds will enable the capital market to better serve the high-quality development of the real economy," said Zhang Gang, chief investment adviser at Southwest Securities.

China has been accelerating the construction of index and product systems. As one of the leading exchanges globally, the SSE, in collaboration with the China Securities Index Company, has been actively enriching the index system and encouraging the development of index fund products. Currently, the combined number of SSE and CSI indexes exceeds 7,000, covering multiple asset classes such as stocks, bonds, commodities and funds, with stock indexes accounting for nearly 70 percent. The index samples span more than 20 major countries and regions worldwide, centering around the markets of Shanghai, Shenzhen, and Hong Kong.

Shanghai Stock Exchange launches new STAR Market index

Japanese shares closed sharply lower Monday, with the Nikkei 225 plunging 3.9 percent to around 64,000 points as investors sold off heavyweight technology stocks, said Timothy Pope, a market analyst for China Global Television Network (CGTN).

Analysts said the drop, which briefly exceeded 4 percent intraday, reflected profit-taking after recent gains and mounting concerns over U.S. rate hikes and the Middle East conflict.

The 225-issue Nikkei Stock Average ended down 2,563.52 points, or 3.85 percent, from Friday at 64,024.60.

The broader Topix index finished 96.71 points, or 2.45 percent, lower at 3,852.38.

Artificial intelligence- and semiconductor-related shares led the decline, tracking Wall Street losses late last week amid growing expectations of a U.S. Federal Reserve rate hike later this year. Lingering uncertainty over the Middle East conflict also weighed on market sentiment.

Despite the Nikkei posting its fourth-largest intraday point drop on record, analysts said the move was more likely a temporary pullback following the recent rally, as growth hopes for the technology sector remain intact.

Pope noted that the tech slide coincided with fresh missile strikes by Israel and Iran, raising worries over higher fuel costs for energy‑import dependent Japan.

"Over in Tokyo the Nikkei 225 shed 3.9 percent to close back around 64,000 points. For the Nikkei the tech slump coincided with more missile strikes by Israel and Iran in the Middle East. For energy import dependent Japan, we are seeing the prospect of still higher fuel costs and that sent government bonds lower. The Japanese Yen also remains around 160 per dollar, which makes currency intervention a real worry for the markets as well. And despite the healthy real wage growth data out of Japan last week, the first quarter GDP was revised down today thanks to weak capital expenditure from businesses," said Pope.

Japanese shares drop sharply as Middle East conflict weighs on sentiment: analyst