How Do You Read the Hong Kong Stock Index?


Quick Answer

The most commonly quoted measure of Hong Kong's stock market performance is the performance of the Hang Seng index, explains Investopedia. The index indicates the performance of the Hong Kong Stock Exchange by covering 40 of the largest companies traded on the exchange. Investors interested in the performance of specific sectors on the Hong Kong Stock Exchange can also check the performance of the Hang Seng sub-indices, which cover commerce and industry, finance, utilities, and properties.

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Full Answer

The Hang Seng Index is a market cap-weighted index, according to the Hang Seng Indexes Company, which means that larger companies have a larger influence on the index's performance. However, a single stock cannot constitute more than 10 percent of the index's value. The index is calibrated to a value of 100 on the base date of July 31, 1964.

U.S. investors wishing to invest in the Hang Seng Index can do so by purchasing exchange-traded funds, such as the Voya Hang Seng Index Portfolio, according to Morningstar. The fund attempts to replicate the performance of the index by holding the same stocks that constitute the index. Its top holdings are technology company Tencent Holdings Ltd, financial services company HSBC Holdings PLC and telecommunications provider China Mobile Ltd.

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