Investment Bank Viewpoint: HSBC Lowers China's Stock Index Target by 5-8% Due to Escalating Tariffs and Trade Tensions
HSBC lowers the target for China's three major stock indices by 5-8%, expecting the earnings of the CSI 300 index to decline by 5-7% due to tariffs. Despite the target downgrade, there is still a potential upside of 11-17%. The bank has upgraded the healthcare sector to "overweight," adjusted the industrial sector to "neutral," and continues to prefer consumer discretionary and information technology sectors. UBS has also lowered its GDP growth forecast for China in 2025 to 3.4%
Reuters Hong Kong, April 15 - HSBC's research report indicates that, given the negative impact of U.S. reciprocal tariffs on corporate profits, the bank has lowered its year-end target for China's three major stock indices by 5-8%, but this still implies a potential upside of 11-17%.
Sun Yu, Head of Equity Strategy Research for HSBC Qianhai Securities in China, stated in the report that, in light of the escalating U.S.-China tariff and trade tensions, the bank now estimates that tariffs on Chinese imports will drag down the earnings of the CSI 300 Index (.CSI300) by 5-7%, compared to the previous forecast of 3-4%.
In light of the latest developments, the bank has lowered its year-end targets for the Shanghai Composite Index (.SSEC), CSI 300 Index, and Shenzhen Component Index (.SZI) by 5-8% to 3,600 points, 4,300 points, and 11,500 points, respectively, but this still indicates an upside potential of 11-17%.
The bank has upgraded the healthcare sector to "overweight," adjusted the industrial sector to "neutral," and continues to prefer consumer discretionary and information technology sectors.
Since taking office, U.S. President Trump has imposed a cumulative 145% tariff on China, including a 20% tariff due to the fentanyl issue and a 125% reciprocal tariff; China has also matched the tariffs on all U.S. goods to 125%. Following Goldman Sachs, another major international investment bank, UBS, has also lowered its forecast for China's GDP growth in 2025 from 4% to 3.4%. (End)
(Reporter Lei Meizhen; Editor Zhang Xiliang)