Morgan Stanley: China's market sentiment indicator improves due to stronger trading volume

LootboxPhobia · 2026-02-27T11:05:44+00:00

Morgan Stanley report shows that China's A-share sentiment indicator improved in the two weeks after the Spring Festival, driven by increased trading volume and market expectations. The weighted MSASI indicator rose by 14 percentage points to 59%, with the ChiNext and A-share trading volumes increasing by 11% and 24%, respectively. Southbound funds saw a net inflow of $3.1 billion. The report also notes that the offshore market faces challenges from AI disruption.

LootboxPhobia

2026-02-27 11:05:44

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Investing.com - Morgan Stanley reports that China’s A-shares sentiment indicator improved over the two weeks following the Spring Festival holiday, thanks to increased trading volume and market expectations ahead of the National People’s Congress.

The company’s weighted MSASI index rose 14 percentage points to 59% as of February 11, while a one-month moving average remained steady at 67%.

From February 12 to 25, the daily trading volume on the ChiNext board increased by 11% to 627 billion yuan, A-share trading volume surged 24% to 2.43 trillion yuan, and stock index futures trading volume jumped 45% to 414 billion yuan. Margin financing and securities lending balances remained stable at 2.62 trillion yuan.

The 30-day Relative Strength Index increased by 2% during the same period. Although the breadth of consensus earnings forecast revisions remains negative, it shows a clear improvement compared to the previous cutoff date.

Southbound capital saw a net inflow of $3.1 billion from February 12 to 25. Year-to-date and month-to-date net inflows reached $16.5 billion and $4.4 billion, respectively.

Morgan Stanley notes that offshore Chinese markets face challenges from concerns over AI disruption and competitive pressures. The firm believes that improvements in AI capabilities on large platforms, profit enhancements, and external market stability are key factors to watch.

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