Chinese stocks have surged, adding $1.3 trillion in market value this month despite economic troubles. Analysts debate the sustainability of the rally, with some cautious due to high margin-financing levels and technical indicators. Wall Street strategists are divided on the outlook, with some citing supportive valuations and others warning of overheating.

Bullish investors remain confident that authorities will support sentiment before a military parade marking the end of World War II. The surge has seen traders pile into various sectors, with artificial intelligence chip designer Cambricon Technologies Corp. rallying 110% in a month. Margin trades have hit a record high, raising concerns about leverage and market stability.

Despite deflation and trade tensions, the stock boom in China continues to surprise, with a rotation out of bonds and enthusiasm around the chip sector driving gains. Analysts attribute the rally to a low-yield environment and new chip models. Some believe the bull market is still in its early stages, with potential for continued growth over the next two years.

Read more at Yahoo Finance: China’s $1.3 Trillion Stock Surge Intensifies Debate on Outlook