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China stocks unfazed by landmark MSCI move to embrace A-shares

Wednesday 03:00 BST

Overview

China stocks failed to get much of a lift after MSCI decided to add some of the country’s shares to a global benchmark equity index. Stocks in Asia were broadly weaker after their US peers pulled back from record highs and the price of oil fell to a seven month-low.

Hot topic

Mainland Chinese stocks, known as A-shares, were slightly higher in the wake of MSCI’s decision to add 222 of them to the index provider’s flagship emerging markets index.

This obligates part of an estimated $1.6tn of investment funds that track the index to buy those names and is a step toward the internationalisation of the Chinese market.

The Shanghai Composite was up 0.1 per cent, while the tech-focused Shenzhen Composite gained 0.2 per cent. The CSI 300, which tracks the 300 biggest stocks from both mainland benchmarks, was up 0.4 per cent.

The Hang Seng China enterprises index, which tracks mainland companies listed in Hong Kong, was down 0.6 per cent.

Commodities

Oil prices were lower amid continued doubts that supply cuts by major producers would be enough to reduce the global crude glut.

Brent crude, the international benchmark, was down 0.2 per cent at $45.93 a barrel, its lowest level since November, while West Texas Intermediate was down 0.1 per cent at $43.48.

Gold was up 0.3 per cent at $1,246.09 an ounce.

Equities

Hong Kong’s Hang Seng was off 0.6 per cent, led by China-focused names.

In Japan the broad Topix benchmark was down 0.1 per cent, while Australia’s S&P/ASX 200 dropped 1.2 per cent led by energy and materials stocks.

Forex

The Japanese yen was the best performer among major currencies, up 0.1 per cent at ¥‎111.32 per dollar.

The UK pound was flat at $1.2631 in Asia after a 0.9 per cent drop on Tuesday when Bank of England governor Mark Carney took a more dovish stance in commentary about interest rates.

The dollar index was flat at 97.743.

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