When traders talk about how Asia is doing, they usually point to a handful of benchmark stock indices. Each one is a basket of leading companies meant to summarise a whole market in a single number. Here is a plain-English guide to the ones you will see quoted most often across the Asia-Pacific.
The heavyweights of North Asia
Japan’s Nikkei 225 is the region’s best-known benchmark, tracking 225 large companies listed in Tokyo. It is price-weighted, meaning higher-priced shares move it more. The broader TOPIX covers a far larger slice of the market and is weighted by company size.
In Greater China, the Hang Seng Index follows the biggest companies in Hong Kong, including many mainland Chinese firms. On the mainland itself, the Shanghai Composite and CSI 300 track Shanghai- and Shenzhen-listed shares. South Korea’s KOSPI rounds out the north, dominated by electronics and carmaking giants.
South and Southeast Asia
India has two closely watched benchmarks: the Sensex, made up of 30 large companies, and the broader Nifty 50. Across Southeast Asia, each market has its own gauge — Singapore’s Straits Times Index (STI), along with benchmarks in Indonesia, Malaysia, Thailand, the Philippines and Vietnam.
Oceania
Australia’s S&P/ASX 200 is the main benchmark down under, heavily weighted toward banks and mining companies, which makes it sensitive to commodity prices and demand from China.
Why the differences matter
Because indices are built differently, they can tell different stories on the same day. A price-weighted index can be swung by a single expensive stock, while a market-cap-weighted one reflects the largest companies. Sector mix matters too: a tech-heavy index and a bank-heavy one will react differently to the same interest-rate news.
- Price-weighted: driven by share price (e.g. Nikkei 225).
- Market-cap weighted: driven by company size (e.g. TOPIX, CSI 300).
- Sector concentration shapes how an index reacts to news.
For anyone following Asian markets, the takeaway is simple: know what an index actually measures before reading too much into its daily move.