Standard Chartered has upgraded Asia ex-Japan equities to overweight citing robust earnings prospects and sustained artificial intelligence (AI)-driven investment, as reported by Reuters from the bank's investment briefing in Singapore. The bank expects Asia ex-Japan to deliver the strongest earnings growth among major global markets in 2026 and 2027, supported by continued AI-related spending and strength in the semiconductor sector. The upgrade reflects the bank's positive outlook on the region's growth trajectory driven by technological advancement and industrial development, with expectations that oil supply disruptions in the Middle East will ease, providing additional relief to the region's energy security.
Within the Asia ex-Japan region, Standard Chartered favours Taiwan and China, followed by India. Taiwan is expected to benefit from its dominant position in advanced chip manufacturing, while China's appeal stems from attractive valuations and its growing innovation ecosystem. India continues to stand out due to its resilient, domestically driven economic growth, according to the bank's analysis reported by Reuters. Senior investment strategist Yap Fook Hien highlighted Taiwan's leadership in chip manufacturing and China's low valuations as key factors in their preference for these markets.
The bank also expects shipping through the Strait of Hormuz to resume within weeks under its base-case scenario, reducing concerns over oil supplies and providing relief to Asia, which remains heavily dependent on energy imports. This development addresses a key concern for the region's energy security and economic stability, as reported by Reuters. Global Chief Investment Officer Steve Brice emphasized that the bank's base case sees this shipping resumption as a significant positive for the region's energy security.
On the global front, Standard Chartered maintained an 'overweight' stance on equities, with a preference for U.S. and Asia ex-Japan markets. The bank also continues to favour emerging-market U.S. dollar-denominated bonds and gold as part of its investment strategy. Looking ahead, the bank projects the S&P 500 index to reach 7,950 and gold prices to climb to $5,100 per ounce by the middle of 2027, reflecting its constructive long-term outlook for risk assets and safe-haven investments, according to Reuters reports.
