Equities in the U.S. and Europe have traded sideways for much of the last two months culminating in a heavy selloff at the end of last week.
However, over in Asia a stellar rally in the Shanghai Composite has seen the region quietly clock up some modest gains. But rather than seeing this outperformance continue, many analysts are backing the idea that it might be time to sell.
"Chinese shares are definitely looking overdone," Jasper Lawler, a market analyst at online derivatives trading firm CMC Markets told CMBC via email. Lawler concentrates on the FTSE China A50, which tracks Chinese blue-chips fairly closely, and believes that it could "roll over" at current levels.
Trading close to 8-month highs, Shanghai's Composite Index saw its largest monthly rise in July since December 2012. Since the middle of June the bourse has risen by 9.7 percent compared with the S&P 500 which has traded flat.
The index has been launched into the "stratosphere," according to Neil Mellor, a senior currency strategist at BNY Mellon. This has been down to a greater confidence in the Chinese economy, he said, with better growth data, more public spending on railways and tax relief for smaller businesses helping to lighten the mood.