Fang Yi, chief strategy analyst at Guotai Haitong, said in a note that although
Middle East geopolitical tensions remain volatile, the overall trajectory points
to a reduced tail-risk scenario. With uncertainty falling and micro-level
trading pressures easing, price discovery should reassert, making
market-structure rallies likely to broaden; he recommends overweighting
A-shares. Emerging risk boundaries and constraints suggest the downward
adjustment in investor risk appetite and expectations is largely complete,
returning markets to endogenous growth dynamics. Accelerating capital-market
reforms imply policy intent to consolidate a steady-to-improving market
backdrop. Traditional sectors are stabilizing; investment in China’s emerging
industries is expected to accelerate given large market demand; China’s
competitive manufacturing is globalizing, lifting multinationals and ROE, and
2026 GDP growth expectations may be revised up.
