MSCI China Index changes prompt sell-offs

Several Hong Kong-listed mainland companies saw sharp drops in their share prices on Tuesday ahead of alterations to the MSCI China Index that kicked in today, the South China Morning Post reported. China Southern Airlines, China Eastern Airlines, Guangzhou Investment, CITIC Resources Holdings and Hopson Development Holdings all fell by more than 10% in trading on Tuesday. They are among the nine stocks that MSCI, an equity index compiler, said would be removed from its mainland benchmark index. Six new stocks have been added to the index. Most of the selling was done by managers of tracker funds, which link their positions to the index. Any change in the composition of the index requires a change in holdings so as to track the performance of the index most accurately.