Goldman Sachs cuts China stock market targets again amid US trade tensions

This is the second time this month that the global investment bank has revised its outlook. A team led by Kinger Lau wrote in a note on Monday that US-China trade tensions have reached unprecedented levels.

These tensions have raised fears of a global recession and increasing risks of the two largest economies in the world separating in key areas such as capital markets, technology, and geopolitics.

According to the note, the 12-month target for the MSCI China Index has been cut to 75 from 81. Similarly, the target for the CSI 300 Index has been reduced to 4,300 from 4,500.

Despite the lower targets, these levels still suggest possible gains of 12 per cent and 15 per cent respectively from Friday’s closing prices.

Chinese stocks have been under pressure due to the intensifying trade war. Recently, Beijing announced 125 per cent tariffs on US goods in response to US President Donald Trump’s 145 per cent tariffs on Chinese products.

These developments have hurt investor confidence and sparked fears of further escalation, as per the note.

However, markets saw a brief rebound on Monday after the US said it would pause tariffs on phones, computers, and other consumer electronics.

Following the announcement, the MSCI China Index rose as much as 2.5 per cent, while the CSI 300 Index gained up to 0.7 per cent.

Goldman Sachs has typically remained positive on Chinese equities, even during periods of market downturn.

Back in February, Kinger Lau and his team had actually raised their MSCI China target to 85, driven by optimism around the rise of AI firm DeepSeek.

But since then, the index has dropped more than 8 per cent amid rising trade threats from Trump.

Earlier this month, on April 6, the bank had already cut its MSCI China target from 85 to 81 after Trump’s new tariffs came into effect on April 2.