HSBC Global Research has upgraded its outlook for Hong Kong stocks to "Overweight" and raised its year-end target for the Hang Seng Index (HSI) from 23,420 to 23,870.
The report highlights an improved economic outlook for China, with recent policy shifts signaling the central government's commitment to stabilizing the economy, which is positive for the A-share market. This, in turn, is expected to benefit the Hong Kong market, where economic conditions are anticipated to improve.
Despite challenges in Hong Kong's domestic consumption, driven by a slowdown in mainland China's tourism and shifts in local spending patterns, HSBC sees supportive factors ahead. These include the start of the U.S. Federal Reserve's easing cycle and initiatives by the Hong Kong government to boost tourism and support the property sector, both of which are expected to provide strong backing for the market.
