Citigroup has raised its rating on Chinese equities from "neutral" to "overweight," citing improving earnings momentum and renewed investor interest in technology shares, which have climbed more than 20 percent so far this year.

The bank's strategists said China's earnings revision trend has turned more positive, and valuations remain attractive despite persistent trade risks. The upgrade reflects growing confidence that Chinese markets are poised to benefit from a combination of low base effects, policy support, and a rebound in corporate profitability.

In contrast, Citigroup downgraded Indian equities to "neutral," saying that while macro conditions remain solid, the country's earnings growth no longer stands out in a slowing global trade environment.