China Market surges as MSCI considers boosting A-shares weighting

The Mainland China equity market inclined on Wednesday, 26 September 2018, as investor risk sentiments underpinned by reports that global index provider MSCI Inc. launched a consultation on a further weight increase of China A-shares in the MSCI Indexes. In afternoon trade, the benchmark Shanghai Composite Index inclined 1.27%, or 35.29 points, to 2,816.43, meanwhile the Shenzhen Composite Index, which tracks stocks on China's second exchange, added 0.75%, or 10.84 points, to 1,448.16. The blue-chip CSI300 index rose 1.58%, or 53.53 points, to 3,433.33.

The index compiler MSCI Inc plans to lift a cap on free-float-adjusted market value to 20 percent from 5 percent for yuan-denominated stocks, according to a statement. That would occur in two stages in 2019. MSCI's also looking to make equities listed on the tech-heavy ChiNext board eligible from next year, and mid-cap stocks from 2020, it said. China A shares won entry to the MSCI indexes in June last year and were added to gauges in May and August. MSCI is seeking feedback from investors by mid-February and will announce its final decision at the end of that month.

CURRENCY NEWS: China's yuan declined against the U.S. dollar on Wednesday, inline with soft mid-point fixing by People Bank of China. Prior to market opening on Tuesday, the People's Bank of China (PBOC) set the midpoint rate at 6.8571 per dollar, 131 basis points weaker than Tuesday's fix of 6.844.

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