Chinese stocks fell nearly 5% yesterday on fears that Beijing would move to cool down the country's stock markets. The Shanghai Composite Index dropped by 4.9% to 2,786.23, its biggest daily fall since June 7, 2006, AP reported. The Shanghai and Shenzhen 300 index dropped 7%, the biggest daily fall in five years. The drop is read as a reaction to warnings from the government and other regulators about an overheated stock market. The drop followed comments by the deputy chairman of the National People's Congress, who warned on Tuesday against investing irrationally in an overheated market.