Judging by investor sentiment in the final quarter of last year, the spectacular rally in mainland Chinese and Hong Kong equities is over. The CSI 300 index of Shanghai- and Shenzhen-listed stocks declined 0.2 per cent while the MSCI China Index fell by over 7 per cent. The Hang Seng Index, meanwhile, lost 4.5 per cent.
While most Wall Street banks remain bullish on Chinese stocks, some have turned more cautious. Morgan Stanley believes 2026 will be “a year of stabilization after 2025’s high…