The late-night rebalancing of Nasdaq of its benchmark Nasdaq-100 Index affected Apple’s shares as it led to a selloff in the shares of the Cupertino-based firm. Many fund managers have expressed surprise over the timing of the announcement. Though the rebalancing is a normal event, but the Nasdaq’s decision to announce it at around midnight made the early trading more volatile.
"It's surprising and unsettling that the Nasdaq would release this information in the middle of the night, let alone at this moment in the calendar -- right ahead of earnings season," said Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati to Los Angeles Times.
Nasdaq justified the move saying that its q OMX will cut the weight of 82 securities to bring them more in line with their market capitalizations. The news affected the lower shares of Apple but proved good for Microsoft Corp. Nasdaq futures went down today before the opening bell. Apple will be the most affected by the rebalancing as its weighting got slashed from 20.5% to 12.3%. But the rebalancing will not affect Apple’s position and it will remain the largest component of the index. Apple’s shares have a market cap of roughly $314 billion. The shares went down 0.4% to $339.91.
John Jacobs, executive vice president in Nasdaq's global index group, said Nasdaq made the annoucement late-night in order to beat the market open in Europe. "In the short-term this is going to have a significant impact and create additional volatility," said Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York.
