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TECH NOW ACCOUNTS FOR 20% OF GLOBAL EQUITY POSITIONING, BNY SAYS

No one expects a quick fix to the snarls in the global supply chain that the war, and the shuttering of the Strait of Hormuz, has brought.

And as such, it will be those parts - or part, in this case - of the market where growth and profitability look less vulnerable, that will benefit. Namely tech.

This trade was already hugely crowded even before SpaceX's SPCX.O blockbuster IPO last week. BNY says concentration risk is now at levels "the market can't afford to ignore."

The bank says semiconductors "and equivalents" now account for at least 20% of total global equity positioning and in the U.S. alone, tech already represents over 30% of holdings. This kind of concentration does raise the issue of bubbles, risk and trades going wrong.

The flipside of this argument is if AI does really deliver all the economic benefits many hope for, this might mean there is a case that technology and semiconductor holdings are still too low rather than too high, BNY says.

"If we combine institutional holdings of the semiconductor and semiconductor equipment industry group (GICS Level 2) and Taiwanese and South Korean equities (where gains correspond to the same industry group), close to 14% of our clients’ total global equity holdings are in this one specific industry group," BNY said, adding that this share has more than trebled over the last three years.

(Amanda Cooper)

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EARLIER ON LIVE MARKETS:

STEADY ON CLICK HERE

EUROPE BEFORE THE BELL: TAKING STOCK (CLICK HERE)

ALL EYES ON HOW WARSH WALKS THE LINE (CLICK HERE)