Skip to main content
Asian stock markets
Asian stock markets

All You Should Know About Asian Stock Markets

We hear a lot about the New York Stock Exchange and Nasdaq in the news as financial markets rely on their movements to evaluate the world's economic sentiment. Yet, Tokyo Stock Exchange, the Shanghai Stock Exchange, and the Hong Kong Stock Exchange are among the largest world markets. 

Although all stock markets work similarly, Asian stock exchanges have features you should know about. Our guide will provide you with all the useful information you need. 

What Is a Stock Market?

Before we start with the Asian stock markets, let's clarify what the stock market is. 

In common words, a stock market is a place where shares of publicly listed companies are traded. They can be bought and sold by traders, investors, and hedge fund managers. 

A stock market is a place where shares of publicly listed companies can be bought and sold by different kinds of investors. 

The stock market serves as a barometer of the world's economic health. It's not a surprise that stocks surge in times of positive sentiment and plunge in times of unstable times.

Below, there is a list of the largest stock exchanges by listed companies' market capitalization as of March 2020. 

World’s largest stock exchanges

As you can see, the Japan Exchange Group, Shanghai Stock Exchange, and Hong Kong Exchanges are ranked third, fourth, and fifth, respectively. 

If you still need reasons why you should invest in Asian stock markets, read on to see the other causes.

Why You Should Invest in Asian Markets 

There are several reasons why you should know about Asian stock markets. 

  • Strong economies. The Asian stock market is represented by many countries. Still, most of them are much more robust than the rest of the world. It means that the companies listed on their stock exchanges are strong and competitive. In general, Asia is a subject of steady, fast growth.
  • Diversification. Consider the Asian stock market as a way to diversify your portfolio. The Asian market is different. Thus, it may work well to hedge your funds.
  • Additional hours. It's not a secret that Asian stock markets work when some other markets sleep. Thus, it can be an option if you look for additional opportunities. 
  • A considerable part of world stocks. Above, we showed you that three Asian stock exchanges are among the top five world markets. It means that they include an enormous part of world stocks that you can trade. 

Asian Stock Markets Benefits and Drawbacks

Let’s consider what advantages Asian stock markets have against other markets. 

Benefits

Drawbacks

Giant companies. Asian stock exchanges are in the top-5 world stock exchanges by company capitalization. 

Regulation. Asian regulation is stricter than in other regions. 

Additional opportunities. Asian stock markets operate during different hours compared with European and American marketplaces. Thus, you have extra hours to trade.

Different factors. Asian economies and companies may differ from common American or European ones. 

Leading economies. Strong world economies represent Asian markets. Thus, they provide excellent opportunities for successful trades. 

List of Asian markets

List of Asian Stock Markets 

Let's look at the largest Asian stock exchanges. 

Tokyo Stock Exchange

The TSE or Tokyo Stock Exchange is the largest Japanese stock exchange created on May 15, 1878. The exchange includes stocks of 3,700 of the largest companies. If you want to trade shares of such Japanese giants as Honda, Mitsubishi, and Toyota, choose this stock exchange. 

Hong Kong Stock Exchange

The Hong Kong Stock Exchange was founded in 1891. As of October 2020, the market capitalization was $43.3 trillion. The exchange is represented by Chinese banks and insurance companies. They include the Bank of China, Industrial and Commercial Bank of China, and China Construction Bank. 

The exchange has over 2,500 companies. To be listed on it, the minimum market capitalization requirement is HK$500 million. At the same time, the public float's minimum value is HK$125 million. 

Shanghai Stock Exchange

Shanghai Stock Exchange is one of the largest world exchanges and one of China's three leading marketplaces. Surprisingly, the Shanghai Stock Exchange is not fully open to foreign investors. It's a subject of tight capital account controls.

The stock exchange was established in 1990. Thus, it is relatively young. All the listed stocks are divided into A and B types. A-stocks are traded in the Chinese yuan. B-stocks are denominated in US dollars and were created only in the 1990s for non-residents. 

Top Asian Stock Market Indices to Trade or Invest In 

There are several options to invest in the stock market. You can buy and sell real companies' shares, invest in indices, trade CFDs of stocks and indices. 

Let us remind you what indices are. An index is a combination of stocks that represent one stock exchange. An index serves as a benchmark of economic health. You may have heard about DJIA, DAX, FTSE 100 index.

An index is a combination of stocks that represent one stock exchange.

The essential advantage of investing in the stock index is the ability to hedge your funds and get rid of a choice. It can be challenging to choose the right stock that will be potentially profitable in the future. Selecting an index, you don't need to waste your time doing all the research about multiple shares. 

Let's choose an Asian stock index. 

Nikkei 225

Let's start with the most popular index. Nikkei 225 is a price-weighted market capitalization index. It includes 225 companies listed on the Tokyo Stock Exchange. If you are interested in the situation on the Japanese stock market, this index is for you. It appeared in 1950 and was called TSE Adjusted Stock Price Average. The companies in the index are reviewed at least once a year, it happens in October. 

Hang Seng Index

The Hang Seng Index is an index of 34 companies listed on the Hong Kong Stock Exchange. The index is a capitalization-weighted one. The index's companies should represent 65% of the whole capitalization of the stock exchange. Four sub-indices represent the companies of the index. These are Commerce and Industry, Finance, Properties, and Utilities. 

China A50

If you want to evaluate the Chinese economy's health, you can choose the China A50 index. It's one of the primary Chinese indexes. It has the second name of the FTSE China A50 Index. 

The index includes stocks of the 50 largest companies that should be registered in the mainland of China. The index combines stocks of companies listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. The stocks are reviewed four times per year. Trading this index, you should be ready for high volatility. 

Nifty 50

The Asian market is represented not only by Chinese and Japanese stocks. Another important economy is the Indian market. The Nifty 50 index represents the 50 largest enterprises listed on the National Stock Exchange. Nifty 50 is a leading Indian index. 

Asian equity markets

Asian Stock Markets: Characteristics

We gathered the main points you should know about to build a successful trading strategy. 

Asian Market Hours

Of course, there can’t be standard hours for all Asian stock markets. However, there are primary markets whose opening hours you should keep in mind. 

Look at the table below.

Country 

Stock Exchange

Trading Hours (UTC)

Japan

Tokyo Stock Exchange

12 a.m. to 6 a.m., lunch 2:30 a.m. to 3:30 a.m.

Hong Kong

Hong Kong Stock Exchange

1:30 a.m. to 8 a.m., lunch 4 a.m. to 5 a.m.

Shanghai

Shanghai Stock Exchange

1:30 a.m. to 7 a.m., lunch 3:30 a.m. to 5 a.m.

India

National Stock Exchange of India

3:45 a.m. to 10 a.m.

Influencing Factors

To predict the price movements, you should combine fundamental and technical analysis. 

As for fundamental factors, you should consider the figures of the companies you trade and the industry they relate to. The earnings report is a leading factor that defines a company's strength. 

To predict the price movements, you should combine fundamental and technical analysis. 

When choosing a market, you should understand what economy fits you more and provides the best opportunities for you. For that, you can check events in the economic calendar. GDP, retail sales, and jobs are among the leading barometers of financial health. 

Also, it's vital to understand how the news affects the price of equities. For example, the trade war between the US and China negatively affected the Chinese economy and the stock market, particularly. 

Also, you can apply technical analysis to define the price direction of indices and stocks. If you trade CFDs, you can simply choose the standard MetaTrader indicators such as Volumes, MACD, RSI, and Moving Averages

Asian Markets and Other Markets: Differences

The main difference is regulation. Before entering the market, you should understand how it's regulated. If you read our guide carefully, you can remember that the Shanghai Stock Exchange is partially closed to foreign investors. Also, some operations can be forbidden. 

Another factor you should take into consideration is the stock exchange's requirements. Every stock exchange has its own requirements for companies. Although giant companies represent the largest world exchanges, there can be different numerical features. 

How to Trade Asian Stock Indices - A Beginners Guide 

Now it's time to learn how to trade indices. 

  • Choose the index you would like to trade. Your choice may depend on the economy and its development. For that, you should do research and find a country that has the best economic projection. Also, you can check previous price movements to evaluate a degree of price volatility. You can do that using the Libertex demo account. The Libertex list of indices is available here. 
  • Open the list of instruments in the trading platform. The whole list is available in MarketWatch. 
  • CFD index is traded like any other instrument in the MT platform. You can place buy and sell orders, choose take profit and stop loss levels. 

Tips and Tricks for Traders

The Asian stock markets are not complicated. Still, we have some tips that can make trading in Asian marketplaces more straightforward.

  • Remember about time. You should remember that Asian trading hours differ from European and American hours. Also, remember that Asian countries have different times as well. 
  • Check economic data. Stocks serve as a barometer of financial health. Not all Asian stock markets are affected by the health of the world economy. Some of them are mostly influenced by the country's economy. Thus, you should consider such vital figures as GDP, retail sales, and jobs data. 
  • Know the companies you trade. If you trade stock indices, you should know the major companies which are included in the index and the industries they relate to. Otherwise, you will lose the ability to forecast the price direction. 
  • Remember about regulations. To be sure what equities you can easily trade, check the country's regulations. However, if you trade CFDs with Libertex, you won't have problems. All the securities available for trading are listed on the Libertex website. 

Conclusion

To conclude, Asian stock markets are among the top world stock exchanges. They provide exciting opportunities for traders and investors worldwide. Still, they have their features you should know about before entering the market. 

Asian equity markets allow traders to deal with stocks and indices. Trading them, you should combine technical and fundamental analysis. The best way to trade Asian stock markets is to use CFDs. To trade CFDs, it's enough to open a Libertex account. If you are a newbie trader, you can open a demo account and try different securities, including CFD stocks and indices. 

Why to trade with Libertex?

  • access to a demo account free of charge
  • technical assistance to the operator 5 days a week, 24 hours a day
  • leverage up to 1:500 for professional clients
  • operate on a platform for any device : Libertex and Metatrader 4 and 5
  • no commissions for extractions in Latin America

FAQ 

It’s time to sum up our knowledge. 

What Are the Asian Stock Markets?

Asian stock markets are stock marketplaces represented by the largest Asian companies. 

What Time Do Asian Stock Markets Open?

Every country has its own opening hours. Here are the trading hours of the largest Asian stock exchanges. Tokyo Stock Exchange is open at midnight UTC, Hong Kong Stock Exchange opens at 1:30 a.m. UTC, Shanghai Stock Exchange opens at 1:30 a.m. UTC, National Stock Exchange of India is open from 3:45 a.m. UTC. 

Which Is the Biggest Stock Exchange in Asia?

Japan Exchange Group is the largest stock exchange in Asia. 

Which Stock Market Opens First in the World?

New Zealand's stock market opens first. It is followed by Australia, Japan, Hong Kong, Singapore, and India. 

Back

Experience the excitement of trading!

Try our risk-free demo account