SHANGHAI, China - Chinese stocks wobbled in volatile trading early Thursday after former U.S. Federal Reserve Chairman Alan Greenspan voiced concern about an eventual correction in China's stock markets following a spate of record highs.
The benchmark Shanghai Composite Index opened up 0.36 percent but then dipped by as much as 1.2 percent Thursday morning. The index later regained lost ground but then lost it, dropping by 0.4 percent to 4,156.87 by late morning.
The smaller Shenzhen Composite Index was down 0.8 percent to 1,213.32.
Shanghai's benchmark index has soared 56 percent this year after surging 130 percent last year, as individual investors have shifted bank savings into the market in hopes of reaping higher returns.
Reports of Greenspan's forecast for an eventual "dramatic contraction" in Chinese share prices, and worries about upcoming U.S. economic data, deflated an overnight rally on Wall Street. The Dow Jones industrials rose briefly above 13,600 for the first time, but ended the day down 0.11 percent at 13,525.65.
Greenspan's comments were reported in China by the country's state-run media, but the reaction was mixed. Economists and Chinese regulators have already been urging investors to heed the potential risks of the recent stock market frenzy, warning corrections are inevitable.
Greenspan's remarks appeared to have greater impact on so-called "B-shares," which are denominated in U.S. dollars or Hong Kong dollars and can be bought by both local and foreign investors.
Such shares have surged recently amid mounting concerns that Chinese-currency "A shares," which are largely off-limits to foreign investors, may be overvalued.
By late morning the Shanghai B share Index had dropped 6.8 percent to 301.45 while the Shenzhen B-share index had fallen 4.4 percent to 711.45.
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