(Bloomberg) -- The reopening rally in China, which has faded, will get another boost in the second quarter as the domestic job and consumption outlook improves, according to Fidelity International.

“The reopening trade is going to surprise the market on the upside as we move closer to the summertime,” said Jing Ning, head of equities at FIL Fund Management (China) Co. Local leisure travel and general discretionary spending will also get a boost as the outlook for jobs improves, she said at a briefing.

A surge in mainland- and Hong Kong-listed stocks that added about $4 trillion in market value since November has evaporated as investors seek more data to back their optimism, and for excess savings from the pandemic to be deployed. A lot of overseas money has remained on the sidelines with hedge funds cutting exposure in February as key indexes fell into correction.

For optimists, however, China is one of the few major economies in the world that is targeting 5% annual growth, with the government counting on a consumption recovery rather than massive fiscal stimulus. Strategists at Goldman Sachs Group Inc. and JPMorgan Asset Management are forecasting double-digit earnings growth for domestic equities for 2023 at a time valuations have fallen.

Read More: China Vice Premier Pledges Nation Will Continue to Open Up

China is leading expectations for revenue growth over the next 12 months globally, according to a survey of 152 Fidelity analysts conducted in December. Valuations on the nation’s stocks are looking attractive, with the benchmark MSCI China Index trading at just 10 times projected earnings versus a multiple of 18 commanded by the S&P 500.

“You have all the stars lining up,” Ning said. “You have an improving macro economy, fragile sentiment, very attractive valuations, an earning cycle coming through in a very volatile market” and a strong currency, she added.

©2023 Bloomberg L.P.