Morgan Stanley warns China stocks May fall another 15 percent

China’s onshore and offshore stock markets could decline by an additional 10 to 15 percent before stabilizing, according to Morgan Stanley. The investment bank noted that a quick rebound is unlikely as current conditions exacerbate negative momentum in the sector.

Chinese stocks have become among the world's worst-performing key markets this month, driven by an uneven economic recovery and a retreat from artificial intelligence investments. The CSI 300 Index entered a technical bear market last week after falling 20 percent from its June high, while the Star 50 gauge lost approximately 40 percent of its value from its record peak.

State-backed funds have intervened to stem further losses following the recent sell-off. UBS Group also indicated that market sentiment would not recover soon, although it suggested that further downside room is limited.

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