Foreign investors piled into Chinese stocks at the worst possible time

A vendor rides on a bicycle with balloons for sale along a street as heavy smog engulfs the city on December 25, 2013 in Neihuang, China. (Photo by ChinaFotoPress/Getty Images)

Chinese stocks sold off heavily at the start of Friday trade but bounced back a bit and were down 1% for the session a short time ago.

It’s a wild market at the moment after yesterday’s apparent panic selling just before the close. Putting yesterday’s losses together with the early sell-off today, the Shanghai Composite lost 11% in less than 24 hours.

And it’s not just China’s celebrated growing class of retail investors getting hosed. It turns out that foreign investors piled a record $4 billion into Chinese equities last week.

Fast FT just noted:

Preliminary data from EPFR shows China equity funds absorbed $4bn from foreign investors in the week — double the previous record.

And when was the last record? The first week of the second quarter, 2008, a time when the Shanghai Composite was trading at 3,599.

Timing is everything.

There’s more over at Fast FT >>

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.