Assessing the Impact of China Stimulus on Stocks: Insights from DBS
Evaluating China Stimulus and Its Impact on Stocks
Investors in Hong Kong are advised to consider the implications of China's fiscal policies and corporate earnings before investing heavily in the stock market rally.
Market Insights from DBS
According to DBS Private Bank, the bank's in-house target for the Hang Seng Index is 20,300 by the end of 2024, made before Beijing's recent policy announcements. This surge pushed the index to a 32-month peak of 23,099.78. Michelle Ho, the Head of Investment Strategy at DBS, noted that while technical overshooting may reach 22,800, the fundamentals depend on upcoming fiscal policies and their effects on corporate earnings.
Recent Market Developments
- Hong Kong experienced significant stock turnover, with HK$620 billion in trades, marking a 9.4% drop—the worst since 2008.
- In mainland China, the CSI 300 Index rose by 5.9% after markets reopened, following a previous surge of up to 10.8%.
Future Projections
DBS expresses optimism for ASEAN equities to perform well due to favorable global interest rates and a weakened US dollar. The bank is particularly bullish on AI-driven stocks, demonstrating potential for immense growth as the market evolves.
As rate cuts from the US Federal Reserve might enhance the momentum for risk assets, DBS shows preference for Chinese banks, technology, insurance, and e-commerce firms in the upcoming quarter, while maintaining a strong position in bonds.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.