Institutions Outline Second‑Half Asset Strategies Amid AI Boom and Geopolitical Shocks
As the first half of 2026 closes, global markets have diverged sharply under the twin forces of the AI technology revolution and geopolitical supply disruptions. Technology and crude oil surged, bonds held firm, while gold corrected after earlier strength.
Equities showed mixed domestic performance: ChiNext and STAR 50 rose nearly 19%, while the SSE 50 fell almost 7%. Semiconductors led with nearly 40% gains, while non‑bank financials and consumer sectors lagged. Commodities were driven by Middle East tensions, with Brent crude up 84% year‑to‑date. Bonds exceeded expectations, with short‑term gains in Q1 and long‑term yields breaking lows in Q2.
Looking ahead, institutions broadly agree on four themes: AI technology as the core driver, structural opportunities in Chinese equities, gold’s long‑term value, and bonds’ defensive role. Yet views diverge on U.S. rates, short‑term gold moves, and A‑share rhythm.
Huatai Securities sees risk assets continuing to outperform, with AI and resources leading, consumption and manufacturing moderate, and services lagging. CICC highlights reasonable valuations and liquidity support, recommending overweight. Lide Fund warns of fragility and capital divergence, suggesting funds may spread to low‑valuation sectors. Hengfeng Bank advises defensive plays in financials and cyclicals, while ICBC Wealth sees limited upside but structural opportunities in earnings‑ and policy‑backed sectors.
Bond consensus is cautious: yields at historic lows, limited downside, but risks of sharp upside contained. CITIC sees declining returns, ICBC Wealth advises neutral duration and selective credit, Huatai notes range trading, and Hengfeng highlights mid‑short end value near 1.8%.
Gold views are mixed short‑term but optimistic long‑term. CICC stresses fundamentals intact despite stagflation fears, with USD 5,500 as a key level. CMB sees volatility, while Hengfeng advises caution amid policy uncertainty but notes strong support from central bank buying and geopolitics.
On U.S. rates, ICBC Wealth sees tightening risk after strong jobs data, while CICC argues risks overstated, citing reduced oil dependence and AI’s labor impact. Zheshang Securities warns dollar strength could challenge emerging market and commodity narratives.
Overall, institutions expect risk assets to remain favored but emphasize selective strategies. AI remains the anchor theme, while bonds and gold provide balance. Divergent views on U.S. rates and liquidity highlight the complexity of the second‑half outlook.
