Three Catalysts for Potential Growth of Asian Stocks​ in H2 2023

• 2 September 2023
• International News
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As the global stock market maintains a “neutral” stance, propelled by the resilience of labor markets and the services sector, analysts find themselves in a cautious but optimistic stance. While uncertainties persist, and a definitive macroeconomic trend remains elusive, experts foresee three potential catalysts that could invigorate Asian stocks in the latter half of 2023, according to Schroders’s analysis on 25 July 2023.

Firstly, the trajectory of Asian corporate earnings growth is emerging as a beacon of hope. Initial apprehensions regarding inflation’s impact on profits have subsided, as companies navigate challenges with adeptness. A noteworthy factor is their ability to transfer the burden of increased costs to consumers, alleviating some concerns. This positive momentum in earnings, bolstered by a slew of encouraging announcements, might serve to rekindle investor trust.

Secondly, the allure of China A-shares and Hong Kong equities is underpinned by their attractive valuations. Should mainland China deploy effective economic stimuli that reinvigorate investor confidence, these stocks could witness an upswing in the latter part of 2023. Similarly, the Japanese stock market displays its own distinctive charm, propelled by local economic improvements. However, given recent gains, prudent caution remains advisable to avoid overexposure.

Moreover, mainland China’s strategic industry support is poised to overtake real estate as a principal growth driver. Sectors like new energy vehicles, renewable energy, consumer services, and semiconductors, buoyed by national policy backing, promise a more stable trajectory. These industries are slated to shape China’s economic landscape and beckon investment opportunities for discerning investors.

As the year progresses, these pivotal factors collectively offer insights into the trajectory of Asian stocks. Though market prudence remains paramount, these catalysts serve as a ray of optimism, potentially influencing investment decisions.

• Analysis
• Business and Market
• Economy and Finance