Weakness in Chinese stocks is undermining the confidence of some of Wall Street’s staunchest supporters, further dampening hopes for a turnaround in the world’s second-largest economy.
In the past two weeks, longtime China optimists UBS Global Wealth Management, Nomura Holdings and JPMorgan Chase & Co. have all downgraded the country’s stocks, citing concerns about slowing real estate demand, piecemeal stimulus and geopolitical tensions ahead of the U.S. election.
The waning patience with an increasingly elusive recovery in China’s stock market comes amid a growing consensus among the world’s biggest banks that the country will miss its growth target of around 5% this year. The market’s weakness could also accelerate a shift away from the China-centric model and toward new favorites such as India, Taiwan and Southeast Asia.
