BROKERAGES in China are sounding the alarm about the nation’s supercharged stocks.

Analysts either downgraded or issued new sell ratings on 84 mainland-listed firms in March, the peak of China’s annual earnings season. That’s the highest number for any comparable period since 2011, and comes at a time when Chinese stocks extended this year’s world-beating rally to a new high.

Traders are taking it as another sign that the government wants to prevent a stock bubble from forming.

“The strong indication that the State is interested in curbing overheating has probably invited some rethinking here,” said Pan Jingyi, market strategist at IG Asia Pte Ltd. in Singapore. “Concerns over growth have added more momentum to these downgrades.”

The loudest alarm came with Citic Securities Co.’s sell rating on People’s Insurance Company (Group) of China Ltd.: a bearish call on a Shanghai-listed insurer, delivered by analysts at China’s biggest brokerage. That triggered a 4.4 percent slump in the Shanghai Composite Index, one of its biggest routs in years.

The Citic analysts wrote at the time that the insurer’s rational price was more than 50 percent below its last close. The downgrading then gathered pace, hitting other hot stocks like Wangsu Science & Technology Co. and Hengdian Entertainment Co.

Reviving risk-appetite while avoiding a bubble has always been tricky in China, a momentum-driven market which has seen two massive meltups in the past decade.

This year, with every major benchmark entering a bull market, small caps overheating and daily turnover surging — drawing comparisons to recent history has been inevitable. (SD-Agencies)