. Understanding the HANG SENG INDEX & HSI Stock Price - CSFX




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Typical spread- 1.8



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Overnight interest (annual) sell- -0.60%

Overnight interest (annual) buy- -0.1.70%

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The Hang Seng Index or HSI is a free-float market capitalization-weighted index of the sixty largest companies that trade on the Hong Kong Exchange (HKEx). HKEx is among the largest stock exchanges in the world, with an aggregate market cap of more than $45 trillion as of 2021

It is widely considered the benchmark equity market index for Hong Kong, and often a barometer of Asian markets more generally.

Understanding the HANG SENG INDEX

The HSI is a free-float-adjusted market capitalization-weighted index that is calculated and disseminated real time at two-second intervals during the trading hours of the Hong Kong stock exchange (HKEx). The HSI is classified as a price index without adjustments made for cash dividends or warrant bonuses.

An 8% capping is applied to avoid any single stock domination of the index. The index targets 60 stocks, but the exact number of constituents can vary slightly at any given time. As of December 2021, there were, in fact, 64 stocks in the index. A committee convenes on a quarterly basis to evaluate the index components and decide if companies should be added or removed.

Factors to keep in mind while trading HANG SENG INDEX

  • US-China Relationship

The relationship between the US and China could be an important factor in the Hang Seng Index. The tension between the US and China could put pressure on the market. In 2018, for example, the Hang Seng index plunged as concerns over a slow pace in a trade deal between the US and China made speculators uneasy. Events like this make it worthwhile for traders to closely monitor how U.S.-China relations develop and how they can affect trade between regions as relevant news emerges.

  • HK Dollar Strength

The Hong Kong Dollar (HKD) could be an indicator of a possible move in the Hang Seng Index. For example, HKD is pegged to USD in the range of 7.75 to 7.85. To control bank liquidity and regulate capital inflows and outflows, the Hong Kong Monetary Authority, the central bank of Hong Kong, buys and sells currencies at all limits.

  • Socio-Political Events

When it comes to economic data, Hang Seng index traders need to track China’s GDP figures and trade balance statistics, and industrial production indicators such as PMI. The Hang Seng Index for June 2021 gave an unusual idea of ​​this figure to 29,468, up 1.1% after data from the previous month showed expansion in Chinese manufacturing.


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