China blue-chips at 18-month high, MSCI talks up A-shares

SHANGHAI, June 26 (Reuters) – China’s blue-chip index closed
at its highest in over a year on Monday, boosted by news of
index provider MSCI saying it could substantially raise the
future weighting of China ‘A’ shares in its emerging markets
benchmark.

The Shanghai SE 50 Index, an index tracking the 50
most representative blue-chips on the Shanghai Stock Exchange,
advanced 0.6 percent to an 18-month high. The index has gained
11.2 percent in 2017, versus a gain of 2.6 percent in the
benchmark SSEC.

The blue-chip CSI300 index rose 1.3 percent, to
3,668.09 points, while the Shanghai Composite Index
ticked up 0.9 percent to 3,185.44 points.

Shanghai Securities News reported MSCI Inc Chief
Executive Henry Fernandez saying MSCI could raise the future
weighting of China ‘A’ shares in its Emerging Markets Index,
potentially adding 195 mid-sized stocks.

MSCI’s decision to add 222 China-listed large-cap stocks to
its Emerging Markets Index (EMI), tracked by around $1.6
trillion, has already fuelled a blue-chip buying spree on the
mainland.

“For now we are optimistic about the ‘A’ share market, which
has been picking up recently, aided by better policy and
liquidity conditions,” Haitong Securities wrote in a report.

Listed companies in the ‘A’ share market are also expected
to record rapid profit growth in the second quarter and for the
full year, the brokerage added.

Sectors rallied across the board. The top performing real
estate sector jumped 4.6 percent to a near
seven-month high, led by bellwether China Vanke
which soared 10 percent for the second straight session.

The market showed scant reaction to news that China imposed
a penalty of nearly 700 million yuan ($102.30 million) on a
Russian-controlled high-frequency trading firm on Friday for
futures market manipulation.
($1 = 6.8423 Chinese yuan renminbi)
(Reporting by Luoyan Liu and John Ruwitch; Editing by Eric
Meijer & Shri Navaratnam)


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