Investors and analysts have started to turn positive on China, three months after a regulatory shock that led some to wonder whether the country had become a no-go zone for money managers.

HSBC turned overweight on Chinese stocks last week, predicting the country’s equity markets were nearing their lowest point and would return to growth for the first time since Beijing issued sweeping regulatory controls to rein in sectors from technology to education.

The bank said it was advising clients to start buying again and that customers had been calling to discuss opportunities. “I expected [clients] to tell me I’m nuts to go overweight on China, but actually they told me they are thinking the same,” said Herald van der Linde, chief Asia equity strategist at HSBC.

“Looking into 2022, sentiment will be very different,” he said, noting it would be a “political year” because of the 20th congress of the Chinese Communist party in November. “Normally leaders don’t want things to be very volatile in years like this.”

Fidelity, which manages assets of $738bn, said it had become “incrementally positive” on China and had started to increase its exposure. “It was when people were asking if Evergrande was going to be China’s Lehman Brothers moment and whether the China investment case was broken, that we . . . looked to take advantage,” said Paras Anand, Fidelity’s chief investment officer for Asia Pacific.

Analysts at Nomura also said investors “should gradually look to rebuild underweight positions in China,” adding there were “increasing signs that recent negativity is abating”.

Read more in Financial Times