What is the Hang Seng? | AvaTrade Tutorial

Hong Kong is a ripe region for conducting business, with a free economy, low tax and almost free port trade. It is for these reasons that the stock market here, the Hong Kong Stock Exchange is the 3rd largest in Asia and the 6th largest globally The Hang Seng is the index which monitors 50 of the biggest companies that are traded on the Hong Kong Stock exchange. The Hang Seng makes up 60% of total market cap of the exchange.

Much like the S&P 500 index in the US, the Hang Seng is designed to give investors a clear picture of the health of the local economy. This is hard to achieve by looking at the individual companies that make up the index, but can be achieved in moments by looking at how the index performs as a whole.

As a result of the free and global nature of the economy in Hong Hong, it is used as a proxy for the wider Asian market. This is especially true for the Chinese market, which can often be mispriced.

Main components of the index are broadly financial in nature and include HSBC holdings, Hang Seng bank, China Construction bank and Industrial and Commercial Bank of China.

If you want to invest in the Hang Seng Index, it’s not realistic to purchase shares in all 50 stocks. Instead you can gain exposure by investing in an ETF fund or you can trade the Hang Seng Futures as CFDs with AvaTrade.

This way you can trade when markets are bullish (rising) or bearish) falling and you won’t have to buy the underlying stock, rather you will be speculating on the price movement.

You can use the MT4, the MT5, the WebTrader or our AvaTradeGo app to trade the Hang Seng here at AvaTrade.

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