Solid fundamentals, rising confidence improve sentiment

The narrowing valuation gap between China's stocks traded offshore and in Shanghai shows rising investor confidence in the future of the A-share market, observers said.

The MSCI China Index, the gauge for offshore stocks, is expected to rise more as the market opens up further to foreign investors, potentially boosting overseas investor sentiment, said analysts.

The index currently trades at 17.4 times reported earnings, compared with 17.5 for the Shanghai Composite Index, the narrowest gap since July 2014, reported Bloomberg.