MSCI embraces China's newly-launched STAR tech stocks

MSCI plans to include stocks listed on China's newly-launched, Nasdaq-style STAR market in its indexes from next month, as international investors seek opportunities in the world's second largest economy.

Beijing is continuing to open up its financial markets despite the ongoing Sino-U.S. trade spat. The country's commitment to further opening up has been evidenced by easing restrictions for foreign financial institutions and opening up the bond market. Major index providers, including MSCI, FTSE Russell and S&P, have begun or are stepping up index inclusion of China A-shares.

Stocks listed on China's STAR market will be included in the MSCI China Indexes and their derived indexes, if they meet eligibility requirements, MSCI said in a statement on Thursday.

The move could potentially improve liquidity in the market and expand foreign investors' access to the country's tech sector.

China launched STAR in July aiming at optimizing the multi-tiered capital market system and enhancing the capital market's role to serve the real economy.

MSCI said the inclusion is separate from adding China A-shares to MSCI China and the MSCI Emerging Markets Indexes.

Following MSCI's announcement, 32 of the 33 stocks on the STAR market gained ground on the day.

(With input from Reuters)