China stocks saw volatile trading on Wednesday morning after U.S. index provider MSCI Inc said it would hold off including China-listed shares in one of its key benchmark indexes.
The Shanghai Composite Index slumped over 2 percent soon after the market opened, as the MSCI decision disappointed a market already bracing for a new wave of initial public offerings, including Guotai Junan’s $4.8 billion mega IPO.
But the early sell-off in blue chip stocks immediately triggered buying that helped indexes recover some losses.
Investors dumped shares previously identified by HSBC as potentially being the biggest beneficiaries from an inclusion, including CRRC Corp Ltd, China Railway Group , ICBC and Bank of Communications .
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