India's weight in the MSCI Emerging Market Index is likely to fall at least by a percentage point in the next one year, causing an expected outflow of as much as $2-3 billion investment by passive funds.
It will also add 168 new mid-caps in November, plus 27 stocks from the tech-heavy ChiNext board.
A-shares now account for just 0.71 percent of the Emerging Markets Index but that will increase to 3.3 percent by November, MSCI said.
Such positive sentiment is a sure indication of the eagerness to embrace the China Opportunity, now available in a relatively new dimension that is the stock market.
Reuters reports MSCI's announcement could potentially draw more than 80 billion USA dollars of fresh foreign inflows to China. "So I think investors are taking very seriously the fact that the rebalancing of MSCI is happening", said Jim McCafferty, head of equity research, Asia ex-Japan at Nomura.
"That doesn't mean it will gin up the global economy as the market is hoping for", he added.
Elsewhere in the region, Japan's Nikkei 225 gained 0.9 percent, helped by a weaker yen, while Australian shares added 0.6 percent.
Meanwhile, geopolitical concerns remain in the background, amid tensions between India and Pakistan and the failure of a summit between Kim Jong Un and Trump to achieve an agreement between the US and North Korea on denuclearization.
Chinese stocks endured an up-and-down session on Friday but the Shanghai Composite Index closed 1.80 percent up, or 53.06 points, at 2,994.01.
US President Donald Trump's chief economic adviser Larry Kudlow cheered markets after he told CNBC "progress has been terrific" on the China-US trade talks, and while he said there was still work to be done he thought the two sides were "headed toward a remarkable historic deal".Читайте также: Electric/Hybrid - SEAT to present its el-Born electric concept auto at Geneva
Mixed messages on trade combined with the collapse of the summit between Trump and North Korean leader Kim Jong-un on denuclearisation, and data from China showing slowing factory activity to pressure United States stocks.
Traders brushed off a negative lead from Wall Street that came after data showed the U.S. economy grew in the fourth quarter at a much slower pace than the previous three months but was much better than forecasts.
After a 16 percent surge from Christmas through the start of this week, MSCI's gauge of global equities has been treading water as investors await results from U.S.
The modest inflation lends support to the Federal Reserve's pledge to be patient on hiking USA interest rates, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
Benchmark 10-year Treasury notes last fell 14/32 in price to yield 2.7622 per cent, from 2.711 per cent late on Thursday.
The dollar rose, hitting 10-week-highs against the yen, as risk appetite improved amid a more upbeat outlook on some of the world's largest economies and on the prospect of a U.S.
US West Texas Intermediate futures fell US$1.42 (RM5.78), or 2.48 per cent, to US$55.80 a barrel.
The Bloomberg Dollar Spot Index rose 0.4 percent, the third straight daily increase.
Spot gold fell 0.3 per cent on the stronger U.S. dollar, to $US1,309.35 per ounce.При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
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