Hang Seng Index: Meaning, Milestones and Significance for Indian Investors

Hong Kong is a major global financial hub. One convenient way to track the Hong Kong market is by keeping an eye on the Hang Seng Index (HSI), which tracks the price of 88 major companies listed on the Hong Kong Stock Exchange, as of September 2025.

The Hang Seng Index is considered one of the most important indices in the Hang Seng family and one of Hong Kong’s market benchmarks. It also serves as a broad indicator of the movement of the Asian markets.

If HSI goes up, it signals that the market may be doing well, and the investors might be feeling confident. Similarly, if HSI goes down, it means that the investors may be feeling anxious.

Table of contents

• Historical performance of the Hang Seng Index
• Market influences on the Hang Seng Index
• Significance for Indian investors

Historical performance of the Hang Seng Index

Created in 1969, the index is compiled and maintained by HSI Services Limited, a wholly owned subsidiary of the Hang Seng Bank.

Hang Seng Index has seen many ups and downs since its inception, just like other financial markets across the world. When it was founded, it comprised mainly of Hong Kong-based companies. Over time, Chinese mainland companies became a part of the index. The Index saw a strong rise in the 1990s as China’s economic reforms deepened and mainland enterprises began to play a larger role in Hong Kong’s market. From 2003 to 2007, HSI surged because of the boom brought by the tech and finance sectors in China.

On 26 January 2018, the index reached an all-time high when it climbed to 33,154.12 points. The earlier record was set on October 26, 2007, when the index breached the 30,000-mark for the first time. (Source: Hang Seng Indexes).

The Hang Seng Index has seen its share of lows as well. The global crash on 1987, often referred to as Black Monday, hit HSI so badly that it lost over 30% in value in a single day. The event forced the Hong Kong Stock Exchange to close for a few days to prevent panic. HSI also fell sharply during the Asian financial crisis in 1997, the SARS pandemic in 2003 and the global crash in 2008.

In recent times, the US-China trade war, COVID-19 pandemic, political unrest in Hong Kong in 2019 and interest rate hikes in the US have affected the Hang Seng Index. However, historically, the index has recovered after tough times. (Past performance may or may not be sustained in future).

Read Also: What is SGX Nifty (GIFT Nifty)? Meaning, Benefits & Impact

Market influences on the Hang Seng Index

Some of the major factors that tend to have an influence over HSI are:

• Political changes: As expected, any political changes or new rules may alter the movement of HSI. Since these factors may make the investors nervous, they might, in turn, push the index down. On the contrary, strong earnings from big companies or favourable economic policies or news may give a boost to HSI.
• US interest rate hike: If the US raises interest rates, it results in money flowing out of Asian markets like Hong Kong. This may negatively affect the Hang Seng Index.
• Global trends: Change in oil prices, currency value or geopolitical disturbances can also affect the Hang Seng Index. HSI reacts to real-world events.

In conclusion, the Hang Seng Index (HSI) is considered to be a convenient way to track the performance of major companies in Hong Kong. Investors who want to invest in international stocks may look at the HSI index to make informed investment decisions. Or, curious investors may simply look at HSI to stay informed about the world markets.

Significance for Indian investors

For domestic retail investors, the Hang Seng Index is not just a reference point for how Asian markets are faring but also a potential investment opportunity. Apart from offshore investment routes, investors can invest in the Hang Seng Index through Exchange Traded Funds and Fund of Funds operated by some Indian AMCs. This may help them create a diversified portfolio and tap into opportunities beyond India.

FAQs:

What is the Hang Seng Index and how is it calculated?

HSI is an index that shows how well the biggest companies listed on the Hong Kong stock market are performing. It can be compared to the Nifty 50 (Nifty) or BSE Sensex (Bombay Stock Exchange) in India.

The Hang Seng Index includes about 88 large companies from various industry sectors like finance, technology, real estate and so on and the index is weighted by the free float market capitalisation of companies. It is calculated by multiplying the share price and number of tradeable shares and the free-float factor of the major companies comprising the Hang Seng Index and dividing it by a special number called Divisor, which is a special number to keep the index stable when the companies are added or removed from the index.

However, the weightage of any company on the index as a whole is capped at 8%, to avoid single stock domination.

What are the historical highs and lows of the HSI and what events caused major downturns?

Since its inception in 1969, the Hang Seng Index has seen many highs and lows. On 26 January 2018, it reached an all-time high of 33,154.12 points. And on October 26, 2007, when the index crossed 30,000 points for the first time, during the pre-global financial crisis boom when tech and finance sectors were flourishing from 2003 to 2007. The lowest point for HSI was in October 1987 when the index lost 30% of its value in a single day. It came during the global crisis of 1987 and the day is often referred to as “Black Monday”.

Which sectors or types of companies have the greatest influence on the Hang Seng Index?

HSI is heavily influenced by certain financial firms, tech giants, real estate firms, and some Utilities and Consumer goods companies.

What external economic or geopolitical factors affect the performance of the HSI?

The Hang Seng Index is affected by many external factors like US interest rates, China’s economic policies, and global trade tensions, especially between the US and China. Events like wars, pandemics, or oil price changes may also impact investor confidence. Since many HSI companies do global business, major international news might cause the index to rise or fall quickly. Political changes in Hong Kong and China also play a big role.

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