Chinese stock market sentiment is positive, but risks from geopolitical tensions and weak consumer demand persist.

From Investing.com: 2024-12-05 19:19:31

Investor sentiment in Chinese mainland stock markets is on the rise ahead of the Central Economic Work Conference. The A-share market has seen increased trading activity and optimism, with the Morgan Stanley A-share Sentiment Indicator showing improvement to 83%. China’s manufacturing sector is stabilizing, but concerns about weak consumer demand remain.

Geopolitical tensions and currency depreciation risks are still impacting the market, with the U.S. dollar-Chinese yuan exchange rate under pressure. Despite current optimism, Morgan Stanley remains cautious about the market outlook for 2025, citing risks such as sustained downward pressure on corporate earnings and U.S.-China tensions.

The upcoming Central Economic Work Conference could introduce new fiscal and monetary measures, though they are expected to be moderate. Policies may focus on supply-side reforms rather than direct consumer stimulation. Morgan Stanley also highlights challenges for China’s equity market, including geopolitical risks and potential tighter global monetary policies.



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