Weakness in Chinese equities is eroding the confidence of some of Wall Street’s staunchest supporters, with hopes for a turnaround fading in the world’s No. 2 economy.
Over the past two weeks, long-standing China bulls UBS Global Wealth Management, Nomura Holdings and JPMorgan Chase & Co. have all downgraded the country’s equities, citing concerns ranging from the property-led demand slump to piecemeal stimulus measures and geopolitical tensions ahead of the U.S. elections.
The thinning patience with an increasingly elusive Chinese stock rebound has coincided with growing consensus among the world’s biggest banks that the country will fail to meet its growth target of around 5% this year. The market weakness could also quicken a shift away from the China-centric model toward new favorites like India, Taiwan and Southeast Asia.
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