(Bloomberg) -- It’s “too early to return to China” for equity investors, as Beijing’s policy isn’t loosening, economic cycles favor other Asian markets and earnings-estimate revisions lag those of the region, according to Credit Suisse Group AG.

The investment bank is sticking with its underweight position on China in its Asia equity allocation, even as many global investors are warming up to the nation’s battered stocks amid bets that Beijing’s regulatory overhaul has potentially peaked.

“While growth is accelerating or broadening in some countries, we do not yet see a recovery for China,” and expect steady rather than loosening government policy ahead, analysts Dan Fineman and Kin Nang Chik wrote in a note Wednesday. “We continue to rank the markets of the south — ASEAN and India as our favourites” due to economic reopening from a low base, they wrote.

Credit Suisse’s views are at odds with recent optimism shown by some of the world’s biggest asset managers such as BlackRock Inc., and also the likes of UBS Group AG and HSBC Holdings Plc. “Cyclical macro trends, EPS momentum and currencies favor other markets in Asia,” CS strategists wrote.

Chinese stocks slumped on Wednesday as a rekindling of U.S.-China tensions shook investors’ newfound optimism, perhaps serving a reminder that while regulatory pain may be easing, multiple headwinds remain for the nation’s markets. These include an economy that’s slowing more than expected, earnings that are losing steam, a fresh Covid-19 outbreak and China Evergrande Group’s liquidity woes. 

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