The make-up of Hong Kong's benchmark index, the Hang Seng, shows why most emerging markets are considered geared plays on global growth: they are packed with cyclical stocks.
In the Hang Seng's case, economically sensitive industries comprise around 80% of the index. In Western markets, cyclicals usually account for 60% of the market or less. Hong Kong's financials the biggest sector, accounting for almost 60% of the market oil, industrials, and technology firms are in the cyclical category.
Telecoms, utilities and consumer goods (made up of personal and household goods as well as food and drink companies) are defensives.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
See Tim Bennett's video tutorial: What is an index?
-
Trouble brews in B&M as bargain shops take a hitOpinion Once a stock market darling, B&M's share price has slumped. What has gone wrong for bargain shops?
-
US and China reach a ceasefire in their trade war after talks in LondonThe US and China's trading relationship – the most important one in the global economy – is back on track. Will the truce last?
