A bullish broker note catapulted banking stocks to the top of the blue chip index.

Morgan Stanley adopted a “glass half-full” view of the sector as it expects to see “gradual relief and improvement” in the banking industry’s earnings, rehabilitation of balance sheets resulting in stronger levels of capital. “We see the opportunity for the sector to re-rate in 2017,” strategists at the bank said.

As banks continue to restructure and de-risk business models, Morgan Stanley expects banking stocks’ appeal will “broaden” in the eyes of investors.

It upgraded HSBC’s rating to equal-weight and raised its target price to 645p from 550p citing an improvement in its revenue outlook thanks to better loan growth in its Asia-Pacific unit.