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在线翻译:
szdaily -> Markets -> 
Stocks fall as trade war fears eclipse MSCI addition
    2018-06-04  08:53    Shenzhen Daily

DOMESTIC A shares slid Friday as U.S. tariffs reignited fears of a global trade war, overshadowing A shares’ long-awaited inclusion in MSCI’s benchmark market indexes that had been expected to draw a surge of foreign inflows in coming months.

The addition was upstaged overnight after the United States slapped tariffs on metal imports from major allies and several quickly retaliated, days ahead of a third round of trade talks between China and the United States.

While fund managers’ strategies are hard to predict, many analysts had expected inflows of US$10 billion around the inclusion, though tepid cross-border flows Thursday had hinted at a subdued initial reaction.

The Shanghai Composite Index started out flat but ended Friday down 0.7 percent, while the benchmark CSI300 dropped 0.8 percent.

Dealers said major global passive fund managers had already completed portfolio rebalancing Thursday to avoid any deviations from the global benchmarks starting Friday, robbing the market of some MSCI opening day momentum.

About a net US$1 billion worth of funds flowed into mainland markets via the Hong Kong stock connect program Thursday. On Friday, net northbound flows fell to about US$355 million.

Some active funds have also been gradually raising their investment in Chinese shares over the past two months, anticipating an MSCI-related bounce in prices from June 1 and taking advantage of a drop in valuations. The Shanghai Composite Index has pulled back about 14 percent from its late January highs.

China’s securities regulator said it would use the inclusion as an opportunity to improve rules governing foreign investment in Chinese stocks. (SD-Agencies)

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