Morgan Stanley predicts Hang Seng index growth of 28% by the end of 2023

Analysts at Morgan Stanley are positive about the outlook for Asian stocks. Analysts at the U.S. bank believe that Asian markets are likely to outperform their global peers this year.

Morgan Stanley expects Hong Kong’s Hang Seng Index to rise another 28% from its current level by the end of 2023, CNBC reported. China’s CSI 300 index, which includes shares of the top 300 companies listed on the Shanghai and Shenzhen stock exchanges, is projected to rise 14 percent by the end of 2023.

The Hang Seng Index (HSI) rose 1.7% (19,591.43 points) and the CSI 300 Index (CSI300) closed up 0.4% (3,999.4 points) in trading on Wednesday, March 22.

Morgan Stanley noted that recent economic data from China and other Asian countries indicated that stocks in the region could rally strongly. With Asian manufacturing PMIs at high levels and expectations of a lull in the U.S. interest rate hike cycle, experts believe investors should once again focus on Asian stocks, especially growth stocks.

Last week, it was revealed that the People’s Bank of China (PBOC) announced that it will cut the deposit reserve ratio for most banks by 25 basis points. According to experts, the PBOC’s decision to lower the deposit reserve ratio (the amount banks must hold as reserves) will act as a new incentive to boost bullish sentiment in emerging markets.

Experts predict that Asian markets are likely to outperform global markets against the backdrop of recent problems in the U.S. and European banking sectors. Morgan Stanley analysts cite as a negative factor the possibility of tighter lending standards in Asia in reaction to the recent events surrounding Swiss bank Credit Suisse, but on a smaller scale than what could happen in the United States. Thus, the impact on Asia’s economic growth prospects would be negligible.

What are Morgan Stanley analysts’ predictions for the U.S. stock market at the end of 2023?
Our forecasts remain modest. Neither strong growth nor strong declines in the U.S. stock market are expected this year. Experts at Morgan Stanley predict that the S&P 500 index will end the year at 3,900 points. This is about 2.6% lower than on Tuesday, March 21.

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