SHANGHAI (Reuters) – Chinese taxi drivers trade stocks from their cars via mobile phones, and housewives queue at brokerages with bags of cash.
But investors have coined a phrase to describe China stock market’s record-breaking bull run: a “rational bubble”.
Eight months into a rally that boosted the benchmark Shanghai index’s 130 percent last year, the market’s elated mood and lofty valuations would risk a crash elsewhere in the world.
But China’s circumstances mean a big downturn remains unlikely, and large sections of the market should keep rising this year, though at a much slower pace than in 2006, say most fund managers and analysts at local and foreign houses.
