The rising pessimism stands in contrast to the start of the year, when China was hailed by almost every Wall Street strategist as one of the top investment destinations as they expected regulatory crackdowns and a deleveraging campaign to come to an end.
“We suggest staying defensive as there is no catalyst in the near term for a sustainable sentiment reversal in Chinese markets,” said Gilbert Wong, a quantitative strategist at Morgan Stanley in Hong Kong -- one of the only teams that warned against buying Chinese assets this year. “The spillover of volatility from the U.S. to China is something we are monitoring.”
This article was provided by Bloomberg News.