Stocks plunge as leveraged traders bail out

Stocks on the Chinese mainland slumped on Thursday in volatile trading, led by technology companies, after traders sold shares purchased with borrowed money for a third day.

The Shanghai Composite Index slid as much as 4.4 percent in the final hour of trading, sending a gauge of 30-day volatility to a seven-year high. The index closed 3.5 percent lower at 4,527.78 points, snapping a two-day advance of 4.7 percent.

The gauge posted its biggest loss last week since the global financial crisis in 2008, on concern valuations had risen to unsustainable levels and a flood of initial public offerings were draining liquidity.