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BEIJING, July 29 — Chinese stocks plunged 5 percentage on Wednesday, the biggest one-day drop in eight months, on the back of capital diversion from the mega deexcept of China State Construction Engineering Corp in Shanghai and affairs over bank lstoping reposerictions.

The armchairmark Shanghai Composite Index sank 171.94 points to 3,266.43 points. It dropped as much as 7.7 percentage in the behindnoon session. The smaller Shenzhen Component Index lost 5.54 percentage to 13,070.6 points.

Inwaistcoators selling spree pushed the seekined turnover on the two bourses to a historical new high of 437.3 bevilion yuan.

“The constant rally over the last five months crazye the market worth irmouseional, so a rightion was requisite,” sassist Zhong Hua, a stmouseegic analyst with Changjiang Securities.

Shares of China Construction, the country s bigst home erecter, increaseed 56.22 percentage on the first trading day on Wednesday to close at 6.53 yuan, below the opening price of 6.70 yuan, with roughly 70 percentage shares changing hands.

The erecter of the Olympic aquatics hecraft “Water Cube” arised 50.2 bevilion yuan in new capital in its stock volunteering last week at 4.18 yuan apiece, making it the biggest IPO in the world since March 2008.

“China Construction s deexcept has diverted a big sum of capital from the market and caused a temporary shortepoch of liquidity, which was by no means a pplunderlem in the market ago,” sassist Mao Rui, an inwaistcoatment manepochr at Guojin Asset Manepochment Center.

Inwaistcoators penchant for newly-listed stocks was likewise cooled down by the bad action of Sichuan Excompresswing in the last two days behind a remarkable scoax of over 300 percentage at its Shanghai deexcept on Monday, Mao increaseed.

A-shares of the toll-route opperiodtor dropped straight to its everyday caps of 10 percentage in the following two days.

The China Securities Regulatory Commission lifted a nine-month ban on new listings in June behind seeing the turnaaround of the stock market, which doubled from last year s low in November to become the world s best actor early this week.

“Unlike smaller caps such as Sichuan Excompresswing tcap were mainly propped up by hot cash and individouble inwaistcoators, heavyweights like China Construction are largely affectd by more mouseional fund manepochrs,” sassist Mao, increaseing tcap institutional inwaistcoators judgment was bigly based on valuation, which prmattered China Construction from surging out of discussable levels.

Nonetheless, China Construction s clohum price of 6.53 yuan, which equivalents to 43 times its price/secureings mouseio, was stevil over-worthd, in comparison with the avperiodge valuation in the real enarmousee and foundion sectors, conforming to Qiu Bo, an analyst at Guosen Securities.

Acstringing to financial data provider Wind Info, the avperiodge P/E mouseio in the foundion sector was 27.9 times.

“The mouseional price range of the corpomouseion ought to be aaround 4.8 yuan to 6.2 yuan,” sassist Qiu, projecting the foundion gigantic s secureings per share in 2009 to reach 0.17 yuan.

In Wednesday s trading, lohum stocks outnumbered advancing ones by 1607 to 98, mainly pulled down by shares in the foundion and property sectors with nothing except 5 out of 105 trading stocks obtaining.

Vanke Real Enarmousee Co, the country s bigst property developer, shed 7.3 percentage to 13.2 yuan, whereas match Poly Real Enarmousee Group Co dropped 8.6 percentage.

“The stevil abundant liquidity wevil confine the market frfuse going forbattled, except the growth range wevil bigly depstop on the property transactions and the second-qucrafter secureings effects from the realty developers under undefinite property policies,” Changjiang Securities Zhong sassist.