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By Bloomberg

Chinese stocks fell, dragging the benchmark index down from its highest level in five years, as technical indicators signaled declines and energy producers slumped.

PetroChina Co. and China Petroleum & Chemical Corp. slumped at least 1.9 percent. Zijin Mining Group Co. and Shandong Gold Mining Co. jumped more than 5 percent as gold traded near a three-week high.

The Shanghai Composite Index fell 1 percent to 3,314.72 at 1:47 p.m, declining from its highest level since August 2009. The Shanghai gauge rallied 64 percent over the past year through yesterday, the best performer among 93 global indexes tracked by Bloomberg, amid speculation the government will further ease monetary policy to support economic growth.

“The risk of correction is running higher” after the recent rally, said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai.

The Shanghai Composite is valued at 12.5 times 12-month projected earnings, the highest level since April 2011, according to data compiled by Bloomberg. The 14-day relative strength index, measuring how rapidly prices have advanced or dropped during a specified time period, was at 78 yesterday, higher than 70 for a sixth day. Readings above 70 indicate a price may be poised to fall.

Hong Kong’s Hang Seng China Enterprises Index dropped 0.7 percent, while the Hang Seng Index added 0.1 percent. The Bloomberg China-US Equity Index slid 0.6 percent in New York yesterday.

Crude Decline

A measure of energy companies in the CSI 300 slid 2.6 percent. Yanzhou Coal Mining Co. slumped 3 percent, while Offshore Oil Engineering Co. declined 2.3 percent.

Crude retreated 1 percent to $47.47 a barrel in New York amid speculation expanding U.S. inventories will exacerbate a global supply glut that’s driven prices to the lowest in more than five years.

A gauge of material shares climbed 0.9 percent. Zhongjin Gold Corp. surged 7.9 percent. Inner Mongolian Baotou Steel Union Co. advanced 1.7 percent.

“Gold continues to benefit from risk aversion,” said Zou Lihu, an analyst at Citics Futures Co. in Shenzhen, a unit of China’s biggest listed brokerage.

The Shenzhen Stock Exchange, China’s smaller bourse, said yesterday it’s studying a plan for a connection with its Hong Kong counterpart, similar to that city’s link-up with Shanghai.

Citic Securities Co. led gains for brokerages, jumping 5.4 percent. GF Securities Co. advanced 3.9 percent.

In Hong Kong, Tencent rose 3.6 percent. The stock jumped the most in eight months in New York yesterday after JPMorgan Chase & Co. recommended buying the shares on prospects growth in advertising revenue will boost profit at China’s second-largest Internet company. Mizuho Securities Asia Ltd. also called Tencent its top Internet pick.