Overseas Turbulence May Trigger a Shift in A-Share Market Trends

Soochow Securities believes that if the Japanese stock market declines and China’s nominal GDP increases quarter-on-quarter, overseas funds may flow into Chinese assets temporarily. In terms of sector selection, the preference will likely remain with "old favorites" since 2020: 1) Globally competitive sectors such as new energy and automotive; 2) Irreplaceable general consumption sectors like liquor within the food and beverage industry; 3) Technology and internet sectors supported by the world's largest middle class.