UBS expects China's stock market to rise another 20%

K-LinePoet · 2026-03-02T06:44:48+00:00

On February 26, Bloomberg reported that UBS Securities Asia forecasts that as inflation expectations rise and translate into improved corporate profits, the Chinese stock market could rise another 20%. The latest report reaffirmed UBS's optimistic outlook on the Chinese market. In November last year, analysts predicted that the MSCI China Index would reach 100 points by the end of 2026.UBS survey shows that due to rising input costs, more Chinese companies plan to raise prices this year, and signs of improvement in overcapacity issues have also emerged. UBS strategists stated that the environment of rising inflation will drive valuation re-ratings and earnings growth per share, potentially pushing the MSCI China Index up by 20%.James Wang's team of strategists pointed out in the latest report that if prices rise, "given the low inflation expectations and the lower positions in inflation-related stocks such as consumer stocks(, the potential stock price reaction will tend to be upward."

K-LinePoet

2026-03-02 06:44:48

On February 26, according to Bloomberg, UBS Securities Asia forecasts that as inflation expectations rise and translate into improved corporate profits, the Chinese stock market could rise another 20%. The latest report reaffirms UBS’s optimistic outlook on the Chinese market. In November last year, analysts predicted that the MSCI China Index would reach 100 points by the end of 2026.

UBS survey shows that due to rising input costs, more Chinese companies plan to raise prices this year, and signs of overcapacity issues are also improving. UBS strategists stated that the environment of rising inflation will drive valuation re-ratings and earnings growth per share, potentially pushing the MSCI China Index up by 20%.

James Wang’s team of strategists noted in the latest report that if prices rise, “given the low inflation expectations and the relatively low positions in inflation-related stocks (such as consumer stocks), the potential stock price reaction would tend to be upward.”

After the rally driven by tech stocks lost momentum this month, the warming inflation environment may once again boost the Chinese stock market. The MSCI China Index fell 5% in February, erasing all gains this year, after rebounding 40% from last April’s lows.

Analysts pointed out that for China, due to lower investor holdings, certain consumer sectors may benefit first. Given ongoing concerns about technological disruption and high valuations, UBS upgraded China real estate and essential consumer goods sectors from reduction to neutral, and downgraded the software sector to reduce.

In fact, besides UBS, other major banks are also optimistic about the local market, benefiting from artificial intelligence and policy measures. In January, Goldman Sachs predicted that Chinese stock indices would rise by 20%.

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