CITIC Securities recently released a research report providing an in-depth analysis of the global stock markets in September 2024. The report highlights a robust upward trend in China's equity market, particularly in the consumer discretionary sector, which outperformed globally and attracted significant investor attention.
The report indicates a clear divergence among Asian markets, with China's A-shares and Hong Kong stocks leading the global rally. The CSI 800 Index and Hang Seng Index surged by 21.7% and 17.5%, respectively, significantly outperforming other Asian and developed markets, driven by a wave of favorable policy announcements.
In terms of valuations, the report notes that stock markets in countries like the United States, Australia, Japan, and India have reached historical highs. In contrast, despite their recent gains, the valuations of A-shares and Hong Kong stocks remain relatively low over the past decade, with the CSI 800 and Hang Seng Index positioned at the 58th and 42nd percentiles, respectively.
On a sector level, utilities and consumer discretionary industries stood out globally, with China's market leading in consumer, healthcare, and information technology sectors. The CITIC Securities team observed that the leading sectors in China's domestic market were not entirely in sync with global trends, showcasing China's market uniqueness and vibrancy.
Furthermore, the report mentions that international institutions are increasingly focusing on China's stock market. Several major asset management firms have upgraded their ratings of Chinese stocks to "overweight," expressing optimism about investment opportunities in China's technology, consumer, real estate, and financial sectors.
Analyzing recent global market trends, the CITIC Securities team concluded that the Federal Reserve's interest rate cuts have had a profound impact globally, marking a shift from a tightening to a loosening monetary policy cycle. Domestically, favorable policy measures have provided strong support for the robust rebound of A-shares and Hong Kong stocks. Looking ahead, China's equity market is expected to continue its upward trajectory amidst volatility, offering more opportunities for investors.
