BEIJING: China’s benchmark stock index tumbled more than 13 percent from this year’s peak amid growing concern that the country’s longest-ever bull market has propelled valuations to unsustainable levels.
The Shanghai Composite Index plunged 6.4 percent to 4,478.36 at the close Friday, entering a correction for the first time since January 2014 and closing at its lowest level in four weeks. Declines were paced by material and industrial companies, with Aluminum Corp. of China Ltd. and Air China Ltd. slumping more than 8 percent.
Analysts are increasingly warning the stock market is in a bubble that will burst after the gauge more than doubled in the past 12 months. The bull market, which turned 928 days old Friday, is the longest since Chinese bourses opened for trading in 1990 and more than five times the average lifespan of the nation’s previous bull markets.
“I would not be too surprised if the correction goes deeper than anticipated,” said Hao Hong, head of China research at Bocom International Holdings Co. in Hong Kong.
