Bruised from a tumultuous year, stock market investors in China are looking to capitalize on any potential policy shifts at the twice-a-decade Communist Party congress next month.
A key strategy is to bet on more stimulus for the property market as mainland authorities attempt to rescue the ailing sector.
And experts expect some steps to complete stalled housing projects that can in turn support the banking sector by reducing loan risks and boosting mortgage demand following the October 16 leadership gathering,
With expectations also low for an imminent shift away from the zero-Covid policy some investors are limiting their exposure to reopening shares.
Investment bank Societe General favors industrials and infrastructure stocks over consumer shares ahead of the party congress.
"There is going to be more support for the property sector because if the property market does not stabilize the economy will not stabilize," said Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management, "and growth protection is the No 1 policy priority."
Additionally, Beijing should take proactive measures to stimulate demand, and local governments need to strike a balance between Covid controls and growth, the China Securities Journal cited former statistics bureau chief Ning Jizhe as saying. Stock market gauges in China last week added to what have already been some of the world's worst losses this year as the US Federal Reserve dealt global markets a hawkish blow.
Having grappled with Covid lockdowns, a property market downturn and Beijing's conflict with Washington over trade and political issues for months, investors are hoping for the market to recover once the leadership reshuffle is complete and policies are settled.
