China’s stocks fall from 8-week high

Shanghai - China’s stocks fell from an eight-week high on heavy volume, led by smaller companies, as investors weighed whether an equity rebound had gone too far.

The Shanghai Composite Index dropped 3% to 3 324.24 at 07:56, heading for its steepest loss since September 15. The ChiNext index of smaller companies slumped 5.5% after soaring 40% through on Tuesday from last month’s low. Leshi Internet Information & Technology, the heaviest-weighted stock on the measure, slid 8.8%.

“This correction is normal considering the recent decent performance,” said Gerry Alfonso, a sales trader at Shenwan Hongyuan Group in Shanghai. “Investors seem to be moving into more defensive sectors with growth stocks underperforming the overall market.”

The CSI 300 Index of Shanghai and Shenzhen equities slid 2.6%. All of the measure’s 10 industry groups fell, with technology companies retreating 5.5% for the biggest decline.

The Shanghai gauge has rebounded 9.2% in October, heading for the steepest monthly advance in six months, amid speculation the government will loosen monetary policy and announce more overhauls of state-owned enterprises to bolster the economy.

Trading volume on the Shanghai Composite was 68% higher than the 30-day intraday average even with the Hong Kong stock market closed for a holiday.