From trading desks to Wall Street analysts, positive calls are growing over Asian stocks this year as the outlook for earnings, valuations and flows all point upward.
The rally since end-October has pushed the MSCI Asia Pacific Index up by almost 23%, outperforming the U.S. benchmark by the most since 1993 while also beating its European peer. The predominant driver has been China’s reopening, with a weakening dollar giving an added fillip as investors look for recession-proof markets.
Heading for the best start to a year since 2012, the MSCI Asia gauge has climbed 7.2% in January. The rally has many more months to run, according to a survey of fund managers by Bank of America. China’s growth outlook is getting rapidly upgraded in a boon for the region’s economies, while earnings estimates are also rising in contrast to downgrades seen in Europe and the U.S.