China’s stocks fell, sending the benchmark index toward its steepest weekly loss since 2008, amid concern the government will clamp down on margin trading and valuations are excessive after a world-beating rally over the past year.
The Shanghai Composite Index dropped 1.5 percent to 4,712.15 at 9:33 a.m., extending this week’s slump to 8.7 percent. Losses were led by technology companies and power producers. Leshi Internet Information & Technology (Beijing) Co. and Wangsu Science & Technology Co. decreased more than 5 percent. SDIC Power Holdings Co. declined 4 percent.
The Shanghai gauge dropped as analysts warned the stock market is in a bubble that will burst after it reached its highest levels in seven years and the 21st Century Business Herald reported the securities regulator is working on margin-trading risk management rules for securities firms. Equities have also been weighed down by new share offerings that have lured an estimated $1.1 trillion in bids.
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