Wall Street Turns Bullish on China as Hong Kong Stocks Lead Global Rally
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Hong Kong’s stock market is roaring ahead of the rest of the world so far this year, prompting major foreign investment banks to raise their targets for Chinese equity indexes amid a surprise earnings rebound, improving policy signals and surging domestic investor confidence.
Morgan Stanley and J.P. Morgan have both raised their 2025 targets for key Chinese indexes, citing structural valuation recovery and a shift in market sentiment. Morgan Stanley lifted its year-end forecast for the Hang Seng Index to 25,800 — up from 24,000 and its second revision in a month — implying a 9.4% jump from the March 27 close of 23,578. The bank also raised its target for the MSCI China Index from 77 to 83.
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- Hong Kong's stock market has experienced significant growth, with major banks like Morgan Stanley and J.P. Morgan raising targets for Chinese equity indexes due to increased domestic investor confidence and improved policy signals.
- Notable gains include a 17.5% rise in the Hang Seng Index, a 19% increase in the China Enterprises Index, and a 25.1% surge in the Hang Seng Tech Index as of March 27.
- Structural recovery signs include Beijing's regulatory shift, easing geopolitical tensions, and China's dominance in AI, alongside Southbound flows exceeding previous years’ inflows.
- January 2025：
- Chinese AI firm DeepSeek achieves breakout success, contributing to discussions on China's dominance in AI
- January 2025：
- The People's Bank of China moves to boost foreign reserve allocations in Hong Kong assets, influencing market strength
- February 2025：
- President Xi Jinping meets with private entrepreneurs, signaling a shift in Beijing's regulatory tone from 'rectification' to 'revitalization'
- March 21, 2025：
- Mark Mobius comments on the importance of investor confidence and government support for business
- March 26, 2025：
- HK$423.3 billion ($54.3 billion) has flowed into Hong Kong stocks, surpassing full-year inflows of 2022 and 2023
- March 27, 2025：
- The Hang Seng Index closes at 23,578, with significant year-to-date gains reported: Hang Seng Index up 17.5%, China Enterprises Index up 19.0%, and Hang Seng Tech Index up 25.1%
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