Morgan Stanley's research reports point out that after the central government introduced a series of economic stimulus measures, foreign capital heavily flowed into the Chinese stock market at the end of September. The inflow was mainly driven by passive funds, with inflows of 6 billion US dollars. In contrast, the inflow of active funds between September 25th and October 2nd was relatively mild, at only about 0.3 billion US dollars. AxJ active funds reduced their shareholding in China by the largest extent, followed by global and emerging markets active funds.

According to Morgan Stanley, as of October 2nd, the cumulative inflow of foreign passive funds has exceeded the highs within this year, returning to the levels of October 2023, while the cumulative inflow of foreign active funds remains at historical lows since the end of 2022. In terms of individual stocks, Tencent (00700.HK), Meituan (03690.HK), PDD Holdings (PDD.US), and ICBC (00939.HK) are most favored, while Trip.com (09961.HK) and Netease (09999.HK) are the most reduced holdings.