China shares plunge after regulators clamp down on margin trading

Chinese stocks plunged Monday, with the benchmark Shanghai Composite Index down over 8 per cent after the country's securities regulator imposed curbs on margin trading, dpa reported.
Brokerage firms' shares tumbled as major firms were punished for violating rules.
Margin trading, a practice whereby investors borrow money from a broker to buy stocks, had fuelled the recent rally in China's stock market, according to the official Xinhua news agency.
The China Securities Regulatory Commission said late Friday that 12 brokerage firms had been found to have illegal operations in their margin trading business.
The plunge came one day before China was expected to release figures on its gross domestic product (GDP) that economists forecast will show the economy expanding at its slowest full-year pace since 1990.