Investor sentiment in China’s A-share market has declined over the past week due to lower volumes and looming macroeconomic uncertainty, according to a note from Investing.com. morgan stanley (NYSE:) Friday.
The investment bank announced that its Weighted Simple Market Sentiment and Activity Score Index (MSASI) fell 6 points and 8 points, respectively, to 67% and 56% as of Dec. 25. This reportedly reflects less enthusiasm compared to the previous week.
The bank said average daily sales for ChiNext, A-shares, stock futures and Northbound trading declined by 16%, 17%, 12% and 27%, respectively, highlighting a significant setback in activity. I am doing it.
“The deflationary environment, downside risks to earnings, a more hawkish tone from the Fed, and downward pressure on the renminbi could lead to further volatility in the stock market,” the bank said.
Morgan Stanley highlighted the impact of China’s weak macroeconomic background, saying policymakers plan to issue 3 trillion yuan (approximately $411 billion) in special bonds in 2025 to shore up the economy. pointed out.
This is said to be a significant increase from the 1 trillion yuan in issuance in 2024. “This is likely to happen,” the analysts said.
However, they pointed to a bright spot in the southbound trade, which saw net inflows of $3.1 billion for the week, marking the 42nd consecutive week of positive inflows. Year-to-date net inflows now stand at $100.5 billion.
Amid these developments, Morgan Stanley advises investors to focus on “pursuing dividend yield and certainty of returns” to weather the volatile environment.
They believe the broader outlook remains cautious as China faces an economic slowdown and evolving global monetary policy.
