Since the outbreak of the Iran conflict, the MSCI China Index has outperformed global indices by approx. 1.4%, while A-shares showed even greater resilience as the CSI 300 Index remained largely flat during the period, UBS released a research report saying.

The broker believed that this further demonstrates that the Chinese equity market offers viable diversification options for global investors.

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From a fundamental perspective, recent geopolitical events posed relatively limited downside risks to the China market, due to factors including: 1) China's low dependency on oil, accounting for only about 20% of total energy consumption; 2) ample oil inventory reserves (approx. 4 months or 1.3 billion barrels); 3) due to government pricing mechanisms, the rise in oil prices has not fully transmitted to downstream customers; 4) higher input costs may drive up PPI and price expectations, which could be beneficial in the current deflationary environment.

Among A-shares, UBS preferred hardware tech, non-ferrous metals, internet, electrical equipment, brokers and stocks related to 'going abroad.'

As for H-shares, the broker continued to favor large internet companies, and added JD-SW (09618.HK)  -1.000 (-0.886%)    Short selling $333.77M; Ratio 174.780%   and BIDU-SW (09888.HK)  -0.800 (-0.730%)    Short selling $180.79M; Ratio 150.451%   to its model portfolio due to their low positioning, inexpensive valuations and active shareholder return initiatives.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-02 16:25.)

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