Chinese shares look attractive even after their recent rally, Citi strategists wrote, citing DeepSeek’s AI breakthrough and still-cheap valuations.

Citigroup Inc. downgraded US equities to neutral from overweight while upgrading China to overweight, saying that US exceptionalism is at least on pause.

Goldman Sachs is maintaining its overweight calls on China H-shares and A-shares — those listed in Hong Kong and on the mainland, respectively.

Asian equities were mixed but mostly lower overnight as the Philippines and Japan outperformed while Thailand and Hong Kong underperformed.

Mainland Chinese investors are taking positions in Hong Kong’s stock market, injecting billions into the city’s equities and reducing their valuation discount to onshore counterparts. Investors are seemingly looking towards the special Asian administration’s markets to lessen the effects of an impending trade war between China and the US.