Chinese stocks are set for another bounce following a recent consolidation, with a key meeting in Beijing next month set to inject more supportive measures into the market, according to Goldman Sachs and Bank of America.
The recent pullback is “a healthy correction” as the stimulus-powered rally got overheated while the momentum from various measures has petered out, according to Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs. Further upside could be unlocked as policymakers announce more support, he added.
“It’s sort of [like] the market caught its breath, and we expect another leg up,” Moe said at a media briefing in Hong Kong on Tuesday.
The MSCI China Index, which tracks 702 Chinese companies listed at home and abroad, has corrected by 6.4 per cent since its peak on May 20 as renewed geopolitical tensions, patchy macroeconomic data and ongoing struggles in the property market prompted investors to take…
