The recent correction in Chinese internet stocks has been seen as a buying opportunity by some investors due to attractive valuations and solid growth prospects.
Financial institutions like Edmond de Rothschild express disappointment in Beijing's stimulus measures, arguing that they are unlikely to address the structural issues in the economy.
UBS Global Wealth Management also reacts to China's fiscal support measures, including a 10 trillion renminbi local government debt resolution plan aimed at reducing hidden debt risks.
However, the lack of additional measures to stimulate consumption or address challenges in the real estate sector falls short of market expectations.
The Hang Seng index has declined due to the absence of immediate fiscal stimulus, raising concerns about the pace of economic recovery in China.
Investors are uncertain about China's attempts to revive economic growth, especially in the real estate sector, and the potential impact of U.S. tariff hikes.
In this volatile environment, UBS's chief investment officer, Mark Haefele, adjusts his investment strategy within Chinese equities, favoring defensive and high-yielding sectors such as financials, utilities, energy, and telecommunications.
He sees minimal impact on investment-grade bonds in China and maintains a neutral stance on Chinese equities, but suggests a more positive outlook if the market experiences a significant downturn and stimulus measures align with or exceed expectations.
The developments in China's fiscal policies and the interplay between U.S. tariffs and China's economic strategies will be closely monitored by investors in the coming months.