China's explosive stock market looks more and more like a bubble - while international cash surges in

Foreign cash is streaming into China's stocks even as the market shows signs of extreme volatility - while analysts pile on to warn that Shanghai equities are in a bubble.

Here's the Financial Times on Friday morning, citing data from fund flow-watchers EPFR:

China equity funds took in $4.6bn from overseas over the past week, according to data from EPFR released on Friday, more than double the previous high set in the second quarter of 2008. At that time, Chinese stocks were in the middle of long and painful downturn after the popping of the 2007 stock market bubble.

A note from Credit Suisse piles on the heat, saying that "the market direction has clearly detached from underlying fundamentals."

London Capital Group analyst Ipek Ozkardeskaya said on Thursday that "the economic conjuncture and companies' performance in China and elsewhere have little to do with the stock prices we see currently on our screens." Capital Economics added: "With valuations divorced from economic fundamentals, the heightened volatility we have seen is likely to continue."

Here's Credit Suisse again:

Technical indicators (percentage deviation from 200 day moving average and the relative strength index) are at among the most stretched levels in at least 15 years and comparable to the 2007 China A-shares bubble.

That's a pretty astonishing take - a long-term look at China's Shanghai Composite Index shows just how much Chinese shares tumbled after the 2007 bubble burst:

David Scutt at Business Insider Australia notes that at not long after Friday's open, Chinese shares plunged by about 5%, adding to the 6.5% collapse recorded on Thursday. In total, that's was a swing of more than 11%.

Usually in markets any drop of 10% or more is considered a "technical correction." For stocks to make that move in just a few hours of trading is a major deal. The fact that the index then came back to make up those gains again (it closed down just 0.15% for the day) shows just how choppy things are.

There's a colossal number of new trading accounts being opened in China, sparking fears about who exactly is trading, and how well-equipped they are to do so.

Those fears were compounded in March when a report suggested that 6% of China's new equity investors couldn't even read.

Whatever happens next in Chinese markets, you can expect a bumpy ride.

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