U.S. index provider Morgan Stanley Capital International (MSCI) Inc. said on Tuesday that it will not add domestic Chinese stocks (Chinese A shares, which are listed in Shanghai and Shenzhen and denominated in yuan) to its key benchmark index this year.

"International institutional investors clearly indicated that they would like to see further improvements in the accessibility of the China A shares market before its inclusion in the MSCI Emerging Markets Index," MSCI managing director and global head of research, Remy Briand, said in a statement.

"In keeping with its standard practice, MSCI will monitor the implementation of the recently announced policy changes and will seek feedback from market participants," he added.