The upcoming China-US Presidential Summit will be an event full of catalysts, with the situation in Iran adding complexity to potential outcomes and stock market reactions, according to Morgan Stanley's research report. Overall, the broker believed that, in both optimistic and pessimistic scenarios, the index reaction will be less volatile compared to last year's reciprocal tariffs and the US-China trade truce.Related News G Sachs Lowers TP for MSCI China Index and CSI 300 Index by 5% and 4%, Still Recommends Overweight on A Shares and H SharesIn one of the scenario, assuming the worst-case scenario where the summit is canceled or postponed, the indices are expected to adjust due to market disappointment, but the magnitude should be smaller than in April 2025. The corrections in the H- and A-share indices are expected to be no more than 10%. This scenario is broadly neutral for most industries, with defensive and physical asset-related sectors showing relative resilience amid higher volatility, while policy-sensitive growth stocks continuing to fluctuate.
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