Chinese stocks fell the most in six weeks, led by financial and energy companies, amid concerns that recent gains were excessive relative to growth prospects.

Industrial & Commercial Bank of China Ltd, the nation's largest lender, slid 1.7 percent, while PetroChina Co, [Company Incorporation USA]the biggest oil company, suffered its biggest drop in two months. SAIC Motor Corp and Tsingtao Brewery Co decreased by more than 2 percent as consumer companies slumped before Friday's trade data.

The Shanghai Composite Index fell for a third day, sliding 1.3 percent to 2,187.67 at the close, the biggest drop since June 19. The losing streak comes after the index rose 9.9 percent from the June 19 low through Monday, sending valuations to the highest levels since December in the biggest rally among global equity indexes.

The gauge will probably end its rally within days and fall about 10 percent, Tom DeMark, the developer of market-timing indicators, said early this week.

Gerry Alfonso, a trader at Shenyin & Wanguo Securities Co in Shanghai, said in an e-mail: "It seems that there wasn't a consensus among investors regarding the sustainability of the rally.

"While the long-term outlook for the market remains positive, it seems clear that a significant amount of investors have decided that now is the time to take profits in some of these stocks. It seems that some investors wanted to make sure that the rally was over before selling."

The Hang Seng China Enterprises Index, also known as the H-share index, slipped 0.94 percent. [Hong Kong Company Registration Guide]The CSI 300 Index closed down 1.3 percent.

The Shanghai index swung between gains and losses at least 10 times on Thursday as 10-day volatility reached the highest levels since April. Price swings fell to a record low on July 8.

The measure of China's $3.5 trillion stock market has outperformed equity indexes in 46 emerging and developed countries in the past six weeks. Signs of monetary easing, accelerated government spending and gains in manufacturing spurred speculation the nation's economic growth will pick up.

July economic data to be released during the next week, starting with Friday's trade figures, will give a sense of how well growth is holding up after accelerating to 7.5 percent in the second quarter from a year earlier. The statistics bureau releases inflation figures on Saturday, followed by industrial production, fixed-asset investment and retail sales next Wednesday.

Exports probably rose 7 percent last month, compared with growth of 7.2 percent in June, according to a median estimate of 44 economists surveyed by Bloomberg.

"We expect trade data to be positive," said Wei Wei, an analyst at West China Securities Co in Shanghai. "Investors are just taking a breather after a strong rally. This is just temporary. Gains will continue."

Measures of energy and consumer-staples shares in the CSI 300 each dropped 1.9 percent, the biggest losses among 10 industry groups. [HongKong Richful  - Hong Kong Company Formation, Offshore Company Incorporation] The sub-indexes have rallied at least 7.8 percent in the past month for the best performance among the groups after materials.

Tsingtao Brewery dropped 4.1 percent in Shanghai and fell 2.3 percent in Hong Kong. Inner Mongolia Yili Industrial Group Co declined 3.1 percent. PetroChina slid 1.5 percent, while coal producer Wintime Energy decreased 6.9 percent, paring a rally to 68 percent since July 22.