Mainland stocks end high on MSCI inclusion

Chinese mainland stocks rose on Friday to end last week higher, on signs tight liquidity is easing and with sentiment lifted by MSCI’s decision to include mainland shares in a key index.

The blue- chip CSI300 index settled up 0.9 percent at 3,622.88 points, the highest close in 18 months, while the Shanghai Composite Index added 0.3 percent to 3,157.87 points.

The smaller Shenzhen Component Index closed 0.99 percent higher at 10,366.78 points.

Total turnover on the two stock exchanges shrank to 405.5 billion yuan ($ 59.3 billion) from 478.1 billion yuan the previous trading day.

For the past week, CSI300 jumped 3.0 percent, posting the best week in 2017, while the Shanghai Composite Index rose 1.1 percent.

The US index provider said on Tuesday it would add 222 mainland- listed stocks, many of them big- cap blue chips, to its Emerging Markets Index, tracked by around $ 1.6 trillion, with the inclusion process starting June 2018.

Analysts expected the inclusion to be a significant boost to China’s stock market in the long run and pave the way for global capital inflows into China’s A shares.

Tight liquidity conditions have also eased, traders said, with the government recently loosening its tight grip on credit regulations.

The nation’s central bank also moved to maintain stability in the financial markets at particular times by providing funds via open market operations ahead of the mid- year macro prudential assessment.

On Thursday, shares related to Chinese conglomerates Dalian Wanda Group and Fosun slumped on news that the banking regulator had ordered checks on offshore loans to several acquisitive Chinese firms which have been snapping up assets overseas, including Wanda, Fosun, HNA Group and Zhejiang Luosen.

These shares, including Wanda Film Holding and Fosun Pharmaceutical, stabilized on Friday after the companies said operations were normal, while Chinese top lender ICBC said the loan assessment was routine.

For the last week, banking and consumers stocks were among the top performing sectors.