HONG KONG, Sept 29 (Reuters) - Global hedge funds
recorded their largest weekly selloff in emerging Asia equities
in more than five months last week, ahead of a major holiday
season, according to a client note from Goldman Sachs ( GS ) seen by
Reuters.
Market participants attributed the selloff to profit-taking,
particularly in technology stocks, as investors sought to reduce
exposure ahead of potential market uncertainties during the long
holidays.
The hedge fund selling was led by Chinese equities - both
onshore and offshore - followed by India and Taiwan, for the
week between September 19 and September 25, Goldman Sachs' ( GS ) note,
dated Friday, said.
The MSCI EM Asia equities Index ended last week down 1.6%,
snapping a three-week rally.
Also reflecting the risk aversion sentiment before the
holiday were Chinese onshore investors. They have rushed to
lower leverage, with the Shanghai Composite recording "largest
daily trimming of margin balances" on Friday since April 2025,
said Wee Khoon Chong, APAC market strategist at BNY.
Emerging Asian stocks have far outperformed global markets
this year buoyed by U.S. interest rate cut expectations and
China's artificial intelligence boom.
The MSCI EM Asia equities Index surged 24%,
compared to a 15% gain in the MSCI World.
Within the region, Korean shares hit an all-time
high last week, jumping 41% year-to-date. China's benchmark
Shanghai Composite also reached a decade high earlier
this month.
China will begin its eight-day Golden Week holiday on
Wednesday.
South Korea will kick off a long holiday week from October 3
to 9, while the Taiwan market will be closed on October 6 and
10, and Hong Kong will be shut on October 1 and 7.