The Chinese national flag flies with the Logiazawi Financial Zone in the background.
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Financial institutions rethink China calls after a sudden trade truce between Washington and Beijing, which raises the country’s growth expectations as well as the stock market expectations.
On Monday, the United States and China Reach an agreement To stop the majority of definitions on each other’s products temporarily for 90 days. Under the deal, mutual definitions will be reduced from 125 % to only 10 %.
This represents a major alleviation of tensions between the two countries after the dream that followed after US President Donald Trump’s tariff on April 2, which led to a decrease in China’s growth predictions.
Now, many institutions review their counterparts in China.
UBS said in a note late Monday that GDP growth in China in 2025 could reach between 3.7 % and 4 %, with an increase of a pre -essential condition of 3.4 %, given how the commercial war escalation may lead to a “smaller shock” of economic growth in China.
Morgan Stanley has also raised the Chinese GDP expectations for the short term about the expectations that companies may try to speed up exports to take advantage of low definitions.
“While the definitions remain high, the suspension window may lead to the front shipments and production,” the investment bank analysts wrote in a note. China’s chief economist in China, Robin Xing and others, wrote in the report that the gross domestic product in the second quarter of GDP in the second quarter can be higher than the current estimate of 4.5 %.
In addition, Xing and his team are now expected to appear in the third quarter of temporary flexibility, which is expected to be higher than 4 %. Earlier, Morgan Stanley said that growth could reduce about 4 %.
Anz Bank now sees the possibility of the GDP in China to reach the top of 4.2 % this year, after the Australian -based bank has reviewed its expectations to 4.2 % of 4.8 % in April.
Likewise, Natixis sees the country’s GDP growth by 4.5 % this year, increasing its 4.2 % basic state if there is a more active incentive and an additional reduction in definitions. This comes after the French bank China’s gross domestic product has reduced to 4.2 % from 4.7 % in early April.
Careful optimism
Optimism about growth prospects is to improve Chinese stock look.
She said in a memorandum after commercial talks, Nomura has raised Chinese stocks to “tactical weight gain”, and has rotated some money from her location in India to China.
CITI raised its target for the Hang Seng index by 2 % to 25,000 by the end of the year, and is expected to reach 26,000 by the first half of 2026.
However, Pierre Lao, an expert in property rights strategies in China in City, said he prefers local plays that avoid definition uncertainty. He promoted the consumer sector from neutral to weight gain. Lao also highlighted the country and technology in the country.
“We see an attractive risk reward in Chinese stocks while the tolerant market evaluation remains.
William, the chief investment employee of Grow Investment Group, who was usually upward in China, believes that recovery in Chinese market is a sustainable reclassification, especially with the motivation of recent Chinese policy and consumption that can provide an additional boost to the Chinese economy and markets.
The Chinese CSI 300 was marginally higher on Tuesday after a rise of 1.6 % in the previous session. The Hang Kong Index in Hang Sing rose about 3 % on Monday, but fell by 1.5 % on Tuesday.
Some experts have warned against not carrying out what may be tactically in stocks.
Luo said that while the US -Chinese commercial conversations were better than what the markets expected, the arrangement is still temporary and is subject to other changes.
This does not change the largest image. The China Stock Market still depends on local basics, which are still weak.
Gary Nug, the chief economist in Natx, said that reducing the 90 -day tariff does not guarantee an agreement, especially given the deterioration of mutual trust between the United States and China.
Dan Wang, the director of China in Eurasia, said the markets have risen because the results of the commercial conversation were a surprise and not priced.
“This does not change the largest image. The stock market in China still depends on the local basics, which are still weak,” she told CNBC.
Wang added that Trump, who believes that the main customs tariff for the leverage of political financial against China may not keep the customs tariffs low for a long time.
“This is a temporary stop, not a penetration in the bilateral relationship. A 90 -day truce in commercial diplomacy,” she said.
Evelyn Cheng of CNBC contributed to this report.
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