FINANCE

Global Banks Turn More Bullish on Chinese Stocks as South Korea Trade Cools

Published: Jul. 21, 2026 1:09 a.m. GMT+8

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Citigroup releases its emerging markets investment outlook report for the second half of 2026. Photo: VCG

Citigroup has upgraded Chinese equities to “overweight” and downgraded South Korean stocks, joining a growing list of global financial institutions that are turning more bullish on China.

The move highlights a broader shift in global capital as investors look beyond crowded technology trades elsewhere in Asia and hunt for cheaper shares and fresh artificial-intelligence opportunities in China.

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Citigroup upgraded China to "overweight," downgraded South Korea, targeting Hang Seng at 29,600 and CSI 300 at 5,600.
Morgan Stanley, JPMorgan, Schroders, and Michael Burry favor Hong Kong and Chinese tech stocks, citing AI and stimulus.
State-backed buying lifted Hang Seng 2.4% Monday, but Chinese indexes are down 1.9-13.8% year-to-date, lagging peers.

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Who’s Who

Citigroup: Citigroup upgraded Chinese equities to overweight and downgraded South Korean stocks. It said a broad China rally is possible if the macroeconomic backdrop improves and geopolitical tensions ease. Citi set end-2026 targets of 29,600 for the Hang Seng Index and 5,600 for the CSI 300.

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What Happened When

July 2025：: Citigroup had maintained a tactical 'overweight' rating for South Korea from this date.

June 2026：: Michael Burry wrote on Substack that pressure on Hong Kong stocks reflected technical factors rather than weakening fundamentals, as capital rotated into South Korea and Japan during the semiconductor rally.

July 16, 2026：: Morgan Stanley stated it remains a good time to add Hong Kong equities, describing late July through August 2026 as a key window for a durable recovery.

July 17, 2026：: Michael Burry wrote on X that as enthusiasm fades for South Korea, Japan, and the iShares Semiconductor ETF, Hong Kong looks increasingly attractive for bargain hunting.

Late Sunday, July 19, 2026：: China Reform Holdings Corp. and China Chengtong Holdings Group said they had made large purchases of Chinese stocks.

Monday, July 20, 2026：: State-backed buying helped lift Hong Kong markets, with the Hang Seng Index rising 2.4% to 25,143, the Hang Seng China Enterprises Index gaining 3% to 8,381, and the Hang Seng Tech Index climbing 2.8% to 4,752.

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