China stocks close up, investors eye mainland MSCI inclusion

SHANGHAI: China stocks posted their biggest daily gain in three months on Tuesday, closing at three-week highs, with financials leading a broad rally as investors bet that MSCI will add mainland shares to its index for the first time.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 3.4 percent to 3,169.56, while the Shanghai Composite Index gained 3.3 percent, to 2,916.62 points.

"Investors are now betting China shares will be included into the MSCI Emerging Market index," said Wu Kan, head of equity trading at investment firm Shanshan Finance.

The CSOP FTSE China A 50 ETF - the largest offshore exchange-traded fund that enables direct foreign investment to Chinese shares - saw a net capital inflow of about 2 billion yuan ($303.9 million) on Monday, the largest single-day inflow in the past year.