Chinese stocks are getting smashed and Morgan Stanley says don’t buy the dip

The market that has surged 106% in the past year plunged to the cusp of a bear market today.

China stocks on Friday posted some of their worst losses in seven years, as investors stampeded out of a market amid increasing signs the nation\’s eight-month-long bull run is not having enough fuel.

The key CSI300 index fell 7.9 per cent, to 4,336.19, as the Shanghai Composite Index lost 7.4 percent, to 4,192.87 points.

For the SSEC,? it was the worst one-day loss since Jan 19. For that CSI300, the drop was the largest since June 2008.

Stocks fell overall, with nearly 2,000 from the roughly 2,800 listed companies in Shanghai and Shenzhen slumping by their 10 percent daily limit. A gauge of equity volatility jumped towards the highest level since 2009.