BEIJING: Chinese stocks declined from a seven-year high amid concern recent gains have gone too far, too fast.
The Shanghai Composite Index dropped 0.9 percent to 3,751.61 at 2:27 p.m. local time, erasing an earlier advance of 1.3 percent. The gauge’s relative strength index climbed to 81 on Tuesday, the highest among major markets worldwide. Readings above 70 are a signal to some traders that shares are poised for a reversal.
International money managers have been paring holdings of mainland shares as valuations climb to the highest levels since 2010 and gauges of Chinese economic growth decline. The Shanghai Composite’s 85 percent advance during the past 12 months has outpaced every other major market worldwide as local investors bet the government will step up monetary stimulus.
