May 31 (Reuters)Chinese stocks come back into favor as the easing of COVID-19 restrictions in Shanghai and stimulus measures to revive a pandemic-hit economy prompt investment banks to reconsider their views in a market shaken by fears of a sharp economic slowdown.

The Shanghai SE Composite Index .SSEC has lost 12.5% ​​so far this year, while the tech-heavy Hang Seng index .HSI fell by 8.5%.

Investment banks

China Stock Commentary

nomura

‘Cautiously bullish’ and rates ‘overweight’ stocks as he sees strong valuation support after big declines; probable recovery in GDP in the second half of the year; worst regulatory crackdown ‘probably behind us’

JP Morgan

Upgrade of Chinese Internet shares in mid-May; expects ‘significant uncertainties’ facing industry to fade

UBS

Chinese stocks will benefit from intensifying stimulus measures, targeted government support from sectors such as technology and real estate and trampled valuations

Schröders

Expects the outlook for China to be brighter in 2023 and a rebound, albeit from a low base, as various clouds continue to overshadow the outlook

*Amundi

Chinese stocks could outperform as potential positive catalysts loom; considering the potential deployment of a domestic mRNA COVID-19 vaccine and any reopening measures taken later this year

Town

Says he still wants to have some risk with China as the country is the only major market where officials are at least mildly supportive

Source: Banks research notes, *media reports

China stores SSEChttps://tmsnrt.rs/3lWyNyD

(Reporting by Bansari Mayur Kamdar and Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel)

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