SHANGHAI (Reuters) - The Shenzhen Stock Exchange on Wednesday sharply increased the number of stocks included in a benchmark index to 500 from 40, ahead of the planned launch of a cross-border stock connect with Hong Kong.

The component adjustment of the Shenzhen SE Component Index boosts the weighting of tech companies at the expense of financial and real estate firms.

The move comes ahead of a June 9 decision by index publisher MSCI Inc on whether to include China A shares in its Emerging Markets Index.

Analysts say that after the launch of the Shanghai-Hong Kong Stock Connect scheme last year, opening of the Shenzhen market, in the form of a similar cross-border scheme, would be crucial in MSCI's decision-making process.

China has not given a timetable for the Shenzhen-Hong Kong Connect, but many expect it to be launched late this year, giving Hong Kong investors bigger access to Shenzhen-listed stocks, and vice versa.

"After the component expansion, the representativeness of the Shenzhen SE Component Index has been greatly increased," the Shenzhen Stock Exchange said in a statement on its website.

The index now covers stocks with a total of about 13 trillion yuan (S$2.80 trillion) in market capitalization, nearly 60 per cent of all Shenzhen-listed shares.

The components include companies listed on the main board, the SME board for small- and medium-sized enterprises, and the start-up board ChiNext.

Both indexes rose sharply on Wednesday.

Weightings of information technology companies jumped to 20 per cent from 14 per cent, while weightings of financial and property stocks have been halved to 14 per cent from 31 per cent, a change that the bourse said better characterises the Shenzhen market and differentiates the market from the Shanghai one, home of China's blue-chip stocks.

Underscoring increasingly overlap, and competition between China's two stock exchanges, the Shanghai Stock Exchange aims to launch a board for companies in emerging industries.