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



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 SE50 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 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 US dollar, has already fuelled a blue-chip buying spree on the Chinese 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 said 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 (around 102.30 million US dollar) on a Russian-controlled high-frequency trading firm on Friday for futures market manipulation.