CHART: Chinese stocks are witnessing unprecedented volatility at present

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Here’s a quick chart of the largest daily trading ranges seen on China’s Shanghai Composite stock index over the past two decades.

Four of the largest ranges ever recorded were seen in the past two weeks. On June 29 and 30 last week, from the high to the low of the session, the range was in excess of 400 points, the highest ever recorded. While it didn’t make the top ten, at 274 points, yesterday’s range was the sixteenth largest on record.

While this is partly reflective of the recent surge in the index, it has doubled over the past 12 months, even when presented in percentage terms, the volatility has been amazing. On June 29 and 30 the range was in excess of 10% of the previous days closing level. Over the past five sessions the range has averaged a mind-boggling 7.84%.

In early trade on Thursday it looks like the volatility is set to continue, despite the best efforts of policymakers to reduce wild intraday swings. The Shanghai Composite has lost a further 3%, and recorded a daily range (so far) of 170 points.

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