Fitch downgrades South Korea and upgrades Chinese stocks under its rating, as it expects the uptrend in emerging markets to broaden in scope

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Citigroup downgraded its rating for South Korean stocks in emerging-market asset allocation while raising its rating for Chinese stocks, saying South Korea’s market is experiencing volatile trading. Meanwhile, with this year’s rally—driven by a handful of artificial intelligence winners—expected to broaden and spread into wider sectors, China’s market could benefit. In a report, Citigroup strategists including David Groman wrote, “If the macro environment continues to remain favorable, including a easing of geopolitical risks, there is room for the scope to broaden.” Citigroup downgraded its rating on South Korea’s stock market from “overweight” to “tactical neutral.” At the same time, Citigroup raised its rating on China’s stock market to “overweight” and raised its rating on Mexico’s market to “neutral,” viewing them as potential beneficiaries of an expanded upside range in emerging markets.
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