China bull market masks momentum breakdown

Hong Kong

JUST below the surface of China's world-beating equity rally, signs of trouble are emerging.

While the Shanghai Composite Index touched a five-year high on Friday after a 63 per cent gain during the past year, other gauges of investor enthusiasm are tumbling. Turnover sank 47 per cent from its peak in December, while new equity account openings fell 50 per cent and purchases using borrowed money dropped 38 per cent. The number of stocks reaching new 52-week highs has declined 75 per cent in the past six weeks.