以下为“Day 10 入摩首日，A股为何不涨反跌？”的英文版：
June 1st, the first day of the inclusion of China’s A shares on the MSCI Emerging Markets Index, witnessed investors’ lukewarm responses: the benchmark Shanghai Composite Index was weaker by 0.66 percent, and the Shenzhen Component Index ended lower 1.23 percent.
Stocks on the MSCI inclusion list also fell, with the Wind index of MSCI-concept stocks weaker by 0.78 percent. Some heavyweights on the list dropped, including Kweichow Moutai Co Ltd, the world’s largest distiller, automaker SAIC Motor Corp Ltd, and consumer appliance giant Midea Group Co Ltd.
Now that the MSCI inclusion means influxes of foreign funds and marks achievements of China’s financial market openness, why Chinese stocks, especially those on the MSCI inclusion list and thus directly receiving foreign funds, experienced declines on the inclusion debut?
In the short term, foreign capital inflow brought by the MSCI inclusion is limited, much of which had flowed into the market before June 1st. The MSCI inclusion was estimated to successively bring $16 billion (100 billion yuan) into A-share market, according to Everbright Securities, while over $70 billion (450 billion yuan) was traded on A-share market each trading day on average in April. Therefore, the scale of capital inflow brought by the inclusion seems too small to have substantial impacts on the market.
Moreover, A-share market received a net inflow of more than $7 billion (45 billion yuan), nearly half of the total estimated foreign capital inflow, through stock connect programs in May. Clearly, the positive influence of the MSCI inclusion had in part released before June 1st.
Another important factor accountable for the unexpected declines should be investors’ fear of the global trade war sparked by a series of announcements by US government. After proclaiming to impose a 25 percent tariff on $50 billion Chinese goods, US government announced to impose additional tariff on steel and aluminum imported from Canada and Mexico. It should be noticed that if external risks can influence A-share market time after time, the domestic economy itself is liable to be vulnerable in certain aspects.