CITIC Securities says US equities have hit fresh highs on renewed app adoption
and hardware repair, and overseas markets should no longer be treated as a
driver for China A-shares. Despite weak sentiment, the firm maintains a
rangebound A-share view for the year and identifies the period around Q3
earnings as the last meaningful buying window; the probability of an index
recovery this year is materially higher than that of new lows. With corporate
earnings trending up, macro risks visible and sentiment depressed, a large index
correction is judged unlikely. CITIC tested five recovery scenarios for the
Shanghai Composite and concludes that, assuming sector cyclicals improve and
short-term incremental funds remain limited, an upside led by tech leaders,
resource/energy-chemical and financial weights best reconciles fundamentals and
liquidity. Stay constructive during the market pause; position into AI and
energy/chemicals.
