From Investing.com: 2024-05-21 01:05:41

Chinese stock markets have rebounded significantly in the past two months, with analysts at Goldman Sachs predicting further gains if certain conditions are met. The blue-chip index and broader index have both risen between 16% to 18% from their lows in late January, driven by stimulus measures and signs of economic improvement.

Goldman Sachs analysts are optimistic about China’s A shares index, raising their 12-month target to 4,100 points from 3,900 points. They believe there is potential for further gains, especially in a bull market scenario. However, companies must deliver on earnings for this to materialize.

The future performance of Chinese markets will depend on how well Beijing implements stimulus measures and the progression of U.S.-China trade tensions. Sector-wise, analysts favor technology, media, and telecommunications, but are cautious on automobiles and capital goods due to risks associated with policy disappointments and ongoing trade disputes.

While the property sector poses a risk, government support is crucial for recovery. Beijing’s recent easing of property market restrictions and direct support for the sector have been positive, but uncertainty remains. Reports of state governments buying houses to reduce inventory for major developers add to this uncertainty.



Read more at Investing.com: Is a China stock rally sustainable? Goldman Sachs weighs in By Investing.com