China Stocks Fall Sharply Again

China’s stocks headed for their worst three-day performance in almost two years amid speculation new share sales will sap funds, valuations have become excessive and the government will take measures to control margin trading.

Utilities and industrial companies, which posted the biggest gains in Shanghai in the past three months, led declines. China Railway Group Ltd. and Huadian Power International Corp. dropped more than 5 percent. China Life Insurance Co. slid 4.8 percent after rising 6 percent yesterday.

The Shanghai Composite Index fell 1.4 percent to 4,168.23 at 9:50 a.m. China’s stocks have fallen from seven-year highs as the securities regulator increased the pace of new share offerings and took action to curb leverage after a world-beating rally for the nation’s equities. China Securities Finance recommended controls over margin trading and short selling at a seminar with China Securities Regulatory Commission Assistant Chairman Zhang Yujun, China Business News reported Thursday.