U.S. President Donald Trump's trip to China is expected to bolster Chinese equities moderately if the current trade deal is extended, South China Morning Post reported Wednesday, citing Morgan Stanley.
The American bank predicted Hong Kong's Hang Seng Index to rise 8% to 28,400, Hang Seng China Enterprises Index to increase 11% and MSCI China Index to climb by 12% in the second quarter, the report said.
MSCI China could surge by up to 27% if U.S.-China bilateral relations improve, especially as China exits deflation, Morgan Stanley said, according to SCMP.
Morgan Stanley's top sectors recommended for investment include energy and materials suppliers, healthcare, semiconductor and automation, the media outlet said.
(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)