Chinese Stocks Tumble as Morgan Stanley Says Don’t Buy the Dip

Chinese stocks tumbled, with the Shanghai Composite Index heading for its biggest monthly loss in two years, amid mounting concern that the nation’s longest-ever bull market has peaked.

Friday’s rout was paced by technology shares and smaller companies, the leaders of China’s world-beating rally through mid-June. About 41 stocks fell for each one that rose on the Shanghai Composite, which sank 7.4 percent to close at a seven-week low of 4,192.87.

China’s $ 8.8 trillion stock market has plunged from first to worst on global performance rankings as leveraged speculators unwind their positions and a growing number of analysts warn that valuations have climbed too far. Morgan Stanley advised clients to refrain from purchasing mainland shares in a report on Friday.

Source: Bloomberg