Domestic and global banks put markers down on equity growth based on stronger earnings, exposure to energy transition
Chinese stocks may extend their gains in the second half of the year as resilient exports and recovering producer prices support economic growth while disruption from high oil prices fades, according to brokerages at home and abroad.
Average full-year earnings growth for mainland-listed companies could accelerate to 10 per cent on the strength of the economy, while households could channel 2 trillion yuan (US$294 billion) into equities, according to Guosen Securities. Founder Securities made a similar call, forecasting earnings growth between 10 and 15 per cent because of a pickup in factory-gate prices.
Midyear equity strategy reports from global investment banks also pointed to more upside room for Chinese stocks through the rest of the year. HSBC Holdings said the CSI 300 Index would close out 2026 at 5,400, translating into an 11 per cent gain from the latest close. Morgan Stanley said that the benchmark would rise to the same level in the following 12 months, while predicting a 27 per cent gain in the MSCI China Index through the end of the second quarter of 2027.
“China appears particularly well-insulated from higher oil prices due to its electrification efforts and more diverse energy mix,” said David Chao, a strategist at US money manager Invesco. “The country is likely to benefit from the energy transition, as evident in the ongoing strength in new-economy sectors, with export growth expected to remain robust, especially of alternative energy technology and electric vehicles, as the world seeks to build greater resilience to future energy shocks.”
Chinese stocks are set to close out the first half with gains, with the CSI 300 having risen about 5 per cent since the start of the year. Technology companies from artificial intelligence chipmakers to producers of optical modules used in AI data centres have contributed the lion’s share of the gains, as investors view China as a critical part of the supply chain of the world’s most cutting-edge technologies.
A gauge of the Shanghai exchange’s tech board has jumped more than 50 per cent this year.