JPMorgan Chase has adjusted its stance on China’s equity market, lifting its rating to “overweight” and citing the expectation of substantial gains in the coming year as outweighing the possibility of sharp declines. The move comes after Chinese stocks relinquished most of their earlier outperformance, presenting what the firm views as an opportune moment for investors.
In a report issued Wednesday, November 26, JPMorgan noted that looking ahead to 2026, the team points to several cumulative support factors, including advancements in artificial intelligence, renewed consumer-driven initiatives and ongoing governance reforms.
This recommendation shift follows a retreat in Chinese equities from recent multi-year peaks reached roughly one month ago. The MSCI China Index has shed 6.2 percent in the current quarter, even as the broader MSCI Asia Pacific Index returned a gain of 1.3 percent.
Despite recent gains, JPMorgan strategists emphasize that China’s stock market remains early in its recovery from a downturn that began in late 2020. The analysts noted that valuations remain acceptable and positioning still light.
JPMorgan’s allocations remain overweight on China, Hong Kong, South Korea, and India; the bank is neutral on Taiwan, and underweight on Southeast Asian markets, based on the note.
