Damo's optimistic forecast: Hang Seng Index will reach 34,700 points in 2026

The Zhitong Finance App learned that the latest outlook report released by Morgan Stanley indicates that after strengthening sharply in 2025, the Chinese stock market is expected to enter a “steady development” stage in 2026. Due to factors such as moderate earnings per share growth and relatively high valuations, there may be limited room for growth in major indices.

Morgan Stanley gave the Hang Seng Index (HSI) a target for the end of 2026: basic scenario: 27,500 points; optimistic scenario: 34,700 points; pessimistic scenario: 18,700 points.

State-owned Enterprises Index (HSCEI) target for the end of 2026: basic scenario: 9,700 points; optimistic scenario: 12,190 points; pessimistic scenario: 6,670 points.

Shanghai and Shenzhen 300 Index (CSI 300) target by the end of 2026: basic scenario: 4,840 points; optimistic scenario: 6,010 points; pessimistic scenario: 3,470 points.

MSCI China Index target for the end of 2026: basic scenario: 90; optimistic scenario: 114; pessimistic scenario: 58.

Morgan Stanley pointed out that the MSCI China Index and Hang Seng Index have both risen by more than 30% since this year, ranking among the top of the world's major stock markets. This reflects investors' positive expectations for an improvement in China's economy and corporate profit structure.

According to the report, to further break through the current level, the market needs to deal with the following factors: the quality and sustainability of corporate profits remains to be seen; valuations have risen markedly in the past 12 months, and there is limited room for continued valuation expansion; global macroeconomic uncertainty is growing, including changes in interest rate paths, geopolitics, and external demand.

Morgan Stanley said that despite short-term challenges, the Chinese market is expected to maintain a steady and sustainable growth trend in 2026.