Chinese stocks surge on back of MSCI rumors
A Chinese investor walks past a screen displaying prices of shares (red for price rising) at a stock brokerage house in Nanjing city, East China's Jiangsu province, May 31, 2016. [Photo/IC]
The Shanghai Composite Index surged as much as 3.34 percent to close at 2916.62 points on Tuesday. Nine securities firms, including Western Securities Co and Shanxi Securities Co, climbed by the daily limit as the top performer in the market.
The Shenzhen Component Index rose 4 percent, while the ChiNext startup index climbed by 4.92 percent.
"Investors are now betting China shares will be included into the MSCI Emerging Market index," said Liu Shiwei, a partner at Shanghai-based Great Rain Investment.
The odds that mainland Chinese stocks will be included in MSCI's indexes got a boost after the Shanghai and Shenzhen stock exchanges on Friday published rules restricting trading halts, a bane of foreign investors that was used to shut down half the stock market amid a $5 trillion selloff last summer.
The largest China-focused exchange traded fund denominated in the yuan currency drew its biggest daily inflows in the past year on Monday.
Liu Jipeng, dean of capital finance institute at the China University of Political Science and Law, said Chinese top leaders' speech on Monday shored up investors' confidence.
In a show of unprecedented importance, both President Xi Jinping and Premier Li Keqiang on Monday addressed an event combining three top-level science conferences attended by 4,000 scientists and science officials. They pledged greater commitment to the research and application of science and technology.
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