Fear over the recent slump in the Shanghai Composite Index is overblown and the volatility in the region is largely due to the low volumes that come in summer trading, Chris Tinker, equity strategist at ICAP, told CNBC.
“It’s not as if we’re going to see one piece of information coming out from Asia that’s going to change every other market, but we’re just a little bit concerned that there might be something we’re not seeing,” Tinker said.
“That’s why in these relatively thin markets you get the volatility because people think what if something’s now changed that I haven’t seen yet,” he added.
The Shanghai index slumped over 15 percent in the last two weeks, which led many investors to question the hopes of a strong recovery in the region.
Tinker points out that 12 months ago the index hit the headlines and caused similar waves among investors, but it quickly fell off the radar screen. He expects the index to quickly fall out of focus this time as well.
“It’s all about wanting to make sure that the marginal news flow coming from other asset markets isn’t going to catch us unawares,” Tinker said.
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