According to a research report from Zhitong Finance APP, Morgan Stanley has stated that the overall outlook for Chinese stocks remains cautious, and it maintains its view from early September to lower the targets for major indices. The firm believes that the current domestic demand outlook is still fragile, with household deleveraging shifting to a confidence-driven phase, meaning that even as borrowing costs decline, residents still tend to reduce debt and increase precautionary savings, leading to insufficient consumption momentum.

Moreover, the pace of fiscal policy implementation is also slow. In the first eight months of this year, general budget expenditure grew by only 1.2% year-on-year, far below the full-year budget target of 4.4%. Morgan Stanley's economics team expects the government to make fine-tuning adjustments through measures such as targeted mortgage subsidies and accelerated energy infrastructure investment, but believes these policies are not yet sufficient to reverse the overall deleveraging cycle.

Despite this, Morgan Stanley remains positive on certain sectors with structural opportunities. The firm maintains its baseline forecast for June 2027, including the Hang Seng Index at 26,550 points; the China Enterprises Index at 8,900 points; the MSCI China Index at 80 points; and the CSI 300 Index at 4,880 points. This implies that Chinese indices have only modest upside potential of 5% to 7% in the future.

The report emphasizes that this relatively conservative outlook is mainly based on two factors: first, weaker macroeconomic data and downgraded GDP forecasts indicate that corporate earnings recovery will be slower than expected; second, the liquidity environment is no longer as favorable as it was three to six months ago.