Extreme volatility becoming the norm in China market

New York

IT looks like the price chart of an over-the-counter penny stock: dizzying gains, abrupt U-turns, harrowing declines.

But this is no obscure security from the rough-and-tumble fringes of Wall Street. It's China's Shanghai Composite Index, the yardstick for an US$8.1 trillion equity market - the world's largest after the US - where extreme volatility is becoming the norm.

Fuelled by record amounts of borrowed money and …