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Citi upgrades China to ‘overweight’ amid AI volatility, geopolitical friction
Wall Street giant Citi adjusts its emerging market asset allocation, identifying China as benefiting from a broadening market rally
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Daisy WuPublished: 11:16am, 20 Jul 2026
Wall Street giant Citigroup has adjusted its emerging market asset allocation, upgrading China to “overweight” as it looks for assets poised to benefit from a broadening market rally.
The bank identified China and Mexico as prime candidates to capture capital rotating out of stretched technology valuations as the market rally expands.
“If the macro environment remains favourable, including easing geopolitical risks, there is scope for broadening,” a team of strategists including David Groman noted in a July 20 research report.
The shift comes as global investors actively debate whether stock performances will expand beyond a narrow group of dominant tech leaders into a wider range of sectors in the second half of 2026.
As part of its tactical shift, Citi downgraded South Korea to “neutral,” ending an overweight stance held since mid-2025 due to heightened market volatility.
However, the bank maintained its “overweight” rating on Taiwan, reflecting its belief that hardware supply chains are underpinning global artificial intelligence infrastructure.
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