How to Trade the Asian Financial Markets

February 01, 2021 12:00 UTC
Reading time: 18 minutes

For many traders, the Asian financial markets now provide a welcome addition to their daily watch lists. The Asia region and other emerging markets are home to 85% of the world's population and are considered to be the new engines of global growth. Whether it's trading the stock markets of the Asian Tigers - Hong Kong, Singapore, South Korea and Taiwan - or the global powerhouses of Japan and China, the potential opportunities these markets provide can certainly not be ignored.

In this article you will learn why the Asian financial markets are so exciting for traders right now, what the best Asian stock markets to trade are, how you can start trading them and much more!

Asian Financial Markets

What are the Asian Stock Markets?

Global stock markets are essentially run like an auction place. It's a place where traders, investors and hedge fund managers can buy and sell shares of publicly listed companies. You may already be familiar with stocks that are listed on the world's largest stock exchange, the New York Stock Exchange (NYSE). It includes companies such as Disney, Nike and Walmart.

While the NYSE and the NASDAQ stock exchange are the two world's largest by market capitalisation, Asian stock markets are not far behind and comprise the next three largest. The third-largest is the Tokyo Stock Exchange (Japan), the fourth-largest is the Shanghai Stock Exchange (China) and the fifth-largest is the Hong Kong Stock Exchange (Hong Kong), as shown in the table below of the ten largest stock exchange operators by market capitalisation:

Stock Exchange Operator Market Capitalisation in Trillion US Dollars
New York Stock Exchange, US 25.53
NASDAQ, US 11.23
Japan Exchange Group 5.1
Shanghai Stock Exchange, China 4.67
Hong Kong Exchanges 4.23
Euronext Europe 3.67
Schzhen Stock Exchange, China 3.28
LSE Group, UK and Italy 2.92
TMX Group, Canada 1.75
BSE India Limited 1.51

Source: Statista - Ten Largest Stock Exchange Operators by Market Capitalisation of Listed Companies as of March 2020.

It's clear to see from the data above that trading and investing in the Asian financial markets provides access to a large portion of the world's stock markets that cannot be ignored. However, within the Asia region, there is a wide variety of different economies.

At one end, you have the highly developed countries which include Japan and the four countries also known as the Asian Tigers - Hong Kong, Singapore, South Korea and Taiwan. Other major players in the region include China, India and others.

It was in the early 1960s that Asian economies started a period of industrialisation that has now led to most of them exporting mass-produced products (electronics, clothing, etc) to the rest of the world. With this growth the region's financial stability has increased which has attracted more foreign investment, helping to build some of the world's most innovative companies and services.

Let's have a look at some of the major Asian stock markets which are tradable from the Admiral Markets trading platform. To follow through on some of these examples and to see for yourself, it may prove useful to first download your free MetaTrader 5 trading platform provided by Admiral Markets. Click the banner below to start your download and access real-time prices of Asian financial markets and many other asset classes, together with free market news updates and many other great features:

MetaTrader 5 Download

The Best Asian Financial Markets to Trade

One of the simplest ways to gain access to the Asian financial markets is through stock market indices. A stock index represents the value of a group of stocks from one country's stock exchange. Charles Dow created the first stock index in May 1896 called the Dow Jones Index (DJI). Instead of following all the individual stocks in a country, traders and investors can follow the performance of a basket of stocks instead.

Many of the world's stock indices are traded on the futures market where contracts are traded via a futures exchange, much like a stock exchange. With Admiral Markets, users can speculate on the price direction of stock index futures using a product called Contracts for Difference (CFDs). This allows traders to potentially profit from rising and falling markets by trading long and short without ever owning the underlying instrument. You can learn more about this topic in our article 'Futures vs CFD Trading'.

Through Admiral Markets users can trade 24 index futures CFDs and 19 index cash CFDs - commission-free - on some of the biggest Asian stock markets such as:

  1. China A50 Index Futures CFDs
  2. Hang Seng Index Futures CFDs
  3. India 50 Index Futures CFDs
  4. Singapore Free Index Futures CFDs
  5. Taiwan 50 Index Futures CFDs
  6. Nikkei 225 Index CFD (cash)

Let's have a look at each of these in a bit more detail.

The China A50 Index

The China A50 Index is also known as the FTSE China A50 Index as it is operated by the UK FTSE Group. The index represents the value of companies from the Shanghai Stock Exchange and the Shenzhen Stock Exchange which are both located in China. This includes Chinese companies such as the Bank of China, PetroChina and the Shanghai Pudong Development Bank.

Below is the long-term, weekly price chart of the China A50 Index Futures CFD:

China A50 Index ChartDepicted: Admiral Markets MetaTrader 5 - China A50 Index Futures Weekly Chart. Date Range: 12 April 2015 - 1 February 2021. Date Captured: 1 February 2021. Past performance is not necessarily an indication of future performance.

The Hang Seng Index

The Hang Seng Index is a free-float, capitalisation-weighted index of companies from the Hong Kong Stock Exchange. The companies in the index are divided into four sub-indices which include: Commerce and Industry, Finance, Properties and Utilities. Some of the companies that make up the index include Hang Seng Bank Ltd, Sands China Ltd and China Mobile Ltd.

Below is the daily price chart of the Hang Seng Index CFD (cash):

Hang Seng Index ChartDepicted: Admiral Markets MetaTrader 5 - Hang Seng Index Daily Chart. Date Range: 12 September 2016 - 1 February 2021. Date Captured: 1 February 2021. Past performance is not necessarily an indication of future performance.

The India 50 Index

Also known as the NIFTY 50 (National Index Fifty), the India 50 Index is the flagship index on the NSE (National Stock Exchange of India). The index tracks the behaviour of a selection of blue-chip companies which are the largest and most liquid Indian securities that are domiciled in India and listed on the exchange. The index includes companies such as ICICI Bank, Reliance Industries and Tata Steel.

Below is the daily price chart of the India 50 Index Futures CFD:

India 50 Index ChartDepicted: Admiral Markets MetaTrader 5 - India 50 Index Futures Daily Chart. Date Range: 20 November 2019 - 1 February 2021. Date Captured: 1 February 2021. Past performance is not necessarily an indication of future performance.

The Singapore Free Index

The Singapore Free Index is also known as the Singapore 25 Index as it tracks the performance of the 25 largest companies listed on the Singapore Exchange. However, the index itself follows the MSCI Singapore Free stock market index. The Morgan Stanley Capital International range of indices are well-known throughout the world and are regularly tracked by institutions and hedge funds. The index includes companies such as DBS Group Holdings, OCBC Bank and Singapore Airlines.

Below is the daily price chart of the Singapore 25 Free 50 Index Futures CFD:

Singapore Free Index ChartDepicted: Admiral Markets MetaTrader 5 - Singapore Free Index Futures Daily Chart. Date Range: 20 November 2019 - 1 February 2021. Date Captured: 1 February 2021. Past performance is not necessarily an indication of future performance.

The Taiwan 50 Index

The Taiwan 50 Index tracks the performance of 50 companies listed on the Taiwan Stock Exchange and was developed by the Taiwan Stock Exchange in collaboration with the FTSE Group. It is sometimes referred to as the FTSE TWSE Taiwan Index Series. It includes companies such as Taiwan Semiconductor Manufacturing, Chunghwa Telecom and MediaTek.

Below is the four-hour, intraday price chart of the Taiwan 50 Index Futures CFD:

Taiwan 50 H4 ChartDepicted: Admiral Markets MetaTrader 5 - Taiwan 50 Index Futures H4 Chart. Date Range: 6 January 2020 - 30 March 2020. Date Captured: 30 March 2020. Past performance is not necessarily an indication of future performance.

The Nikkei 225 Index

The Nikkei-225 Index is a price-weighted average of the 225 top rated Japanese companies that are listed in the First Section of the Tokyo Stock Exchange. The index was published in May 1949 and is different from other indices which use a company's market capitalisation for entry into the index. The index includes companies such as Nissan, Sony and Toyota.

Below is the long-term, weekly price chart of the Japan 225 Index CFD (cash):

Nikkei 225 Weekly ChartDepicted: Admiral Markets MetaTrader 5 - Nikkei 225 Index Weekly Chart. Date Range: 31 May 2015 - 1 February 2021. Date Captured: 1 February 2021. Past performance is not necessarily an indication of future performance.

With the Admiral Markets Trade.MT5 account you can also now trade Nikkei share CFDs, meaning you can speculate on rising and falling prices of some of the largest Japanese companies listed on the exchange. However, with the Invest.MT5 account you can also buy physical shares of 195 different Japanese companies.

If you are considering investing in Japanese shares or would like to invest in other stocks and Exchange-Traded Funds (ETFs) from around the world, the Invest.MT5 offers:

  • The ability to invest in the best shares and ETFs from 15 of the largest stock exchanges in the world.
  • Open an account with just €1 minimum deposit and invest from just $0.01 per share with minimum transaction fees of just $1 on US stocks.
  • Receive free real-time market data, with no delays, at no extra cost.
  • Create a stream of passive income by collecting dividend payouts.
  • Use the world's most popular multi-asset class trading platform, MetaTrader 5.

You can get started right now by clicking the banner below to enjoy all of the features above and more!

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When Can You Trade the Asian Stock Markets?

Now you know what some of the most important Asian financial markets are called, what time are they open for trading? Below is a table showing their opening hours in both GMT and local time:

Stock Exchange Trading Hours (GMT) Trading Hours (Local Time)
Japan Exchange Group 00:00 - 06:00 (lunch from 02:30 - 03:30) 09:00 - 15:00 (lunch from 11:30 - 12:30)
Shanghai Stock Exchange 01:30 - 08:00 (lunch from 04:00 - 05:00) 09:30 - 16:00 (lunch from 11:30 - 13:00)
Hong Kong Stock Exchange 01:30 - 08:00 (lunch from 04:00 - 05:00) 09:30 - 16:00 (lunch from 12:00 - 13:00)
Shenzhen Stock Exchange 01:30 - 07:00 (lunch from 03:30 - 05:00) 09:30 - 15:00 (lunch from 11:30 - 13:00)
Bombay Stock Exchange 03:45 - 10:00 (no lunch break) 08:00 - 15:50 (no lunch break)

How to Start Trading the Asian Stock Market

Once you've opened your live, or demo trading account and downloaded your free MetaTrader 5 trading platform you can then start to make trading decisions on Asian financial markets, stock indices and other asset classes. To start trading, you must first find the symbol you wish to trade by following these steps:

  1. Open the MetaTrader 5 trading platform
  2. Open the Market Watch section from the View menu at the top or by pressing Ctrl+M on your keyboard. This will open up a list of market symbols on the left side of your chart.
  3. Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
  4. This will then open the window shown below which details all the markets available for you to trade on such as Index Futures CFDs and Cash Indices CFDs.
  5. Select either an individual symbol or the category group and click 'Show Symbol' and OK. The instruments selected will then be shown in the Market Watch window.

MetaTrader 5 add symbolsDisclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

Now you can left-click on one of the symbols you would like to view and drag it on to the chart to view the current and historical price of the symbol you've chosen. From here you can now open up a trading ticket:

  1. Right-click on the chart.
  2. Select Trading.
  3. Select New Order, or press F9 on your keyboard.
  4. A trading ticket will open for you to input your entry price, stop loss and take profit levels and unit size (volume).

MetaTrader 5 new orderDisclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

In order to learn more on how to trade the Asian financial markets with Admiral Markets and the MetaTrader 5 trading platform, watch the video below:

Creating a Trading Strategy For the Asian Stock Markets

A trading strategy is extremely important when trading the financial markets. This is because the right strategy helps traders streamline their decision-making process, resulting in higher quality trading decisions rather than emotional and rash trading decisions. Within any strategy, there are two common types of analysis:

  1. Fundamental analysis. This involves analysing a company, index or region at an economic level. For example, this could include analysing GDP, jobs and retail sales numbers among other data points.
  2. Technical analysis. This type of analysis is more common and involves analysing a company, index or region's historical trading price via a price chart. Trading patterns and technical trading indicators can often leave clues on the trend and possible turning points in the market.

The MetaTrader Supreme Edition Plug-In

Another great resource to help build your own trading strategy for the Asian financial markets is by using the Trading Central Technical Insight™ indicator which provides actionable technical analysis for a wide variety of asset classes including Asian stock market indices. Let's have a look at an example by opening the free Trading Central indicator in the MetaTrader 5 trading platform.

If you haven't yet downloaded the Trading Central indicator you can do so by upgrading your MetaTrader 5 trading platform. This can be done by downloading the MetaTrader 5 Supreme Edition package from Admiral Markets, which is completely free! Click on the banner below to download it today:

MetaTrader Supreme Edition Download

Once downloaded you can now open the Trading Central Technical Insight™ indicator. You can learn more about this in the 'How to Trade with Trading Central' article.

In order to open the indicator, press Control + N to bring up the 'Navigator' window in MetaTrader 5. From here, select 'Expert Advisors' and double click on 'Admiral - Connect', as shown below:

MEtaTrader 5 expert advisors

Depicted: Admiral Markets MetaTrader 5 Supreme Edition - Expert Advisors

Click 'OK' on the resultant dialogue box and then select 'Technical Insight Lookup' from the top of the screen. Let's now search for an index such as the Nikkei 225 stock market index.

Technical Insight Indicator Admiral MarketsDepicted: Admiral Markets MetaTrader 5 Supreme Edition - Trading Central Technical Insight™ Indicator.

The indicator now presents the trader with a range of different technical analysis events. These are filtered into Summary, Short-Term (2 - 6 weeks), Intermediate-Term (6 weeks - 9 months) and Long-Term (more than 9 months). After clicking on 'Short-Term' this provides the trader with active technical analysis events that have happened, as shown below:

Trading Insight Technical IndicatorDepicted: Admiral Markets MetaTrader 5 Supreme Edition -Trading Central Technical Insight™

The above image shows technical analysis covering a wide range of different indicators such as moving averages, MACD, Stochastic, Commodity Channel Index and more. It also provides price action trading patterns such as inside bars and gap up setups. It's important to remember that these are just technical events that have occurred. When combined with your own analysis and risk management principles it could prove to be a powerful addition to your trading arsenal.

Why Trade With Admiral Markets?

  • Trade with a well-established, regulated company which includes regulation from the UK's Financial Conduct Authority.
  • Benefit from a negative balance protection policy, to protect you from adverse movements in the market.
  • Access the fastest and most popular online trading software, MetaTrader, for FREE which you can use on PC, Mac, Web, Android and iOS operating systems.
  • Open an Invest.MT5 investing account to buy shares and ETFs from 15 of the largest stock exchanges in the world.
  • Open an Admiral.Markets or Trade.MT5 trading account to trade via CFDs in order to go long and short a market to potentially profit from rising and falling markets.
  • Gain free access to the Trading Central indicator through the feature-rich MetaTrader Supreme Edition provided by Admiral Markets.

Trade Risk-Free With an Admiral Markets Demo Account

Did you know that with an Admiral Markets demo account you can trade in a virtual trading environment risk-free absolutely free? It's a great way to build your trading skills until you are ready for a live account. Plus you get access to a range of benefits including free market analysis, access to advanced Trading Central indicators, tools and expert analysis and much, much more! Practice trading the Asian financial markets today by clicking the banner below and opening a free demo account:

Admiral Markets Demo Account

About Admiral Markets

Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or recommendation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Jitanchandra Solanki
Jitanchandra Solanki
Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.