China stocks fall most in 6 weeks as rift with U.S. deepens

China stocks dropped the most in six weeks on Wednesday following Wall Street's tech rout, with heightened Sino-U.S. tensions and falling oil prices also curbing risk appetite.

China stocks dropped the most in six weeks on Wednesday following Wall Street's tech rout, with heightened Sino-U.S. tensions and falling oil prices also curbing risk appetite. ** Some stock investors rotate into bonds amid signs of tighter regulatory scrutiny and climbing yields.

** The blue-chip CSI300 index fell 2.3% to 4,584.59 points, posting its biggest one-day percentage drop since July 24. The Shanghai Composite Index lost 1.9% to 3,254.63 points. ** Shenzhen's start-up board ChiNext, which is up more than 40% this year, slumped 4.8%.

** Wall Street closed lower on Tuesday as heavyweight technology names extended their sell-off to a third straight session, sending the Nasdaq into correction territory. Adding to the gloom, oil prices hit lows not seen since June. ** A sell-off in high-flying U.S. technology shares, fuelled partly by concerns about excess purchases of call options, has increased the risk of a larger correction across other markets.

** Investors are also circumspect ahead of the November U.S. President election, with Donald Trump expected to rachet up pressure on China as part of his campaign strategy. ** Chinese semiconductor shares continued to slide as a possible U.S. sanction against Chinese chip-making giant SMIC cast a pall over the sector.

** Shanghai-listed shares of Semiconductor Manufacturing International Corp plunged 6%. ** Should the ban occur, more than half of SMIC's sales could be affected, potentially dealing a bigger blow to Chinese equipment and materials players, brokerage CLSA wrote in a note. ** Sentiment in China was also hurt by signs that regulators are stepping up crackdown on speculation. Three high-flying stocks listed on the ChiNext market suspended trading on Wednesday, citing investigations into "abnormal volatility".

** "It's time to swap stocks for bonds," said Li Bei, fund manager, Banxia Investment. ** "Currently, A-share valuations are purely supported by risk appetite, which is totally unreliable. Reversal of sentiment can happen at any time," she wrote on Wednesday.