Morgan Stanley says Chinese stocks peaked amid plunge

China's stock market plunged over 7 percent on Friday. Morgan Stanley thinks that more declines are likely.

From Bloomberg:

Morgan Stanley is calling the top of China’s stock rally.

The brokerage predicts the Shanghai Composite Index will fall between 2 percent and 30 percent over the next 12 months, according to Jonathan Garner, Morgan Stanley’s chief Asia and emerging market strategist...

The “balance of probabilities is that the top for the cycle on Shanghai, Shenzhen and ChiNext has now taken place,” Garner wrote in a note dated Friday. “This is probably not a dip to buy.”