Goldman Sees Gains In China's Stock Markets As Overextended

In line with comments made by central bank Governor Zhou Xiaochuan, Goldman Sachs Group Inc., the US based investment bank, has stated that a ‘correction? may be due in Chinese stock markets. With the CSI 300 Index advancing by a whopping 82 percent over the past year, analysts are looking at stock valuations that have completely exceeded earnings potential. Incidentally, the stock market mania has been reflected in the massive amount of new securities account openings over the Golden Week holiday. According to records by the China Securities Depository and Clearing Corp, Chinese investors opened a record 385,121 new accounts last week. Volume has also exceeded past figures, mounting to $48.96 billion. Subsequently, the possibility leaves markets open for another Feburary 27th adjustment that would bring stocks back to correct valuations. For now, however, it seems the only direction for Chinese equities is up.