Goldman Sachs Cuts China Stock Targets Again Amid Escalating Trade Tensions
Goldman Sachs has cut its target level for Chinese stock indices for the second time this month in regards to the escalating US-China trade disputes and global economic uncertainty.
The cuts in the MSCI China and CSI 300 indexes are a sign of caution as markets face tariff tensions and fears of a global slowdown.
Goldman Sachs Revises Index Targets Downward
Goldman Sachs reduced its 12-month target for the MSCI China Index to 75 from 81, implying a 12% upside from an estimated April 11 close of around 66.5, based on recent data.
These adjustments follow previous cuts on April 7, when the MSCI target fell from 85 to 81 and the CSI 300 from 4,700 to 4,500.
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The company has shifted its focus to domestically oriented A shares over H shares, upgrading banks and developers to overweight.
Goldman Sachs is anticipating possible policy assistance from Beijing to support markets, but the repeat cuts are an indication of growing concerns about economic stability.
Trade Frictions Drive Market Concerns
The transformations are being driven by rising US-China trade tensions, as Beijing retaliated by imposing tariffs on US exports after President Donald Trump’s tariffs against Chinese imports, even though specific rates remain fluid.
The escalating measures have raised fears of a global recession and decoupling across technology, capital markets, and geopolitics.
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On April 14, markets reacted to a US decision to pause tariffs on electronics, with the MSCI China Index rising 2.6% and the CSI 300 gaining 0.2%.
Goldman’s earlier February optimism on account of AI breakthroughs like DeepSeek has faded due to these threats.
Analysts have warned that prolonged trade tensions could further destabilize investors, with volatility being expected unless tensions reduce.
Markets Face Challenges, Recovery Possible
The revised targets show caution in China’s equity markets. The MSCI China Index stood at 64.54 on April 8, while the CSI 300 closed at 3,759 on April 11, both pressured by trade barriers and domestic economic challenges.
MSCI China Index (Source: MacroMicro)
Despite the pressure, assumptions of 12% and 15% implied appreciation suggest the ability for recovery were there to come strong stimulus out of China or if negotiation keeps going in a more positive direction.
Investors should track Beijing’s policy moves and US-China developments.
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Goldman’s position towards defensive stocks such as banks is proof of a strategy to manage near-term risks while hoping for long-term opportunities.
The adjustments show a measured view of China’s market dynamics in regards to the ongoing uncertainties.
