The mainland's regulator will conduct on-site probes into securities firms' margin trading and short-selling businesses, in the latest effort to cool a buying spree that drove the key indicator up 20 per cent in the past three weeks. Deng Ge, a spokesman for the China Securities Regulatory Commission, said yesterday that some brokerages would be inspected soon to "ensure the healthy development of the financing businesses", according to a statement posted on the regulator's microblog. Deng's remarks confirmed mainland media reports earlier that the commission was wary of risks in the soaring margin trading business as unseasoned investors chased the sudden rally. Outstanding margin loans offered by brokerages were valued at more than 900 billion yuan (HK$1.1 trillion) yesterday, more than double the amount in the first half of this year. On Tuesday, the combined turnover on the Shanghai and Shenzhen stock exchanges hit a record high of 1.24 trillion yuan as the benchmark Shanghai Composite Index slumped 5.4 per cent following a 23.3 per cent jump since November 20. The roller-coaster ride on the share market prompted the regulator to step in to curb irrational buying with retail investors convinced that the market had turned into a bullish mode. The recent rally started on November 20 when the benchmark advanced 9.5 per cent in a seven-day winning streak as millions of investors joined the bull run, engineering a dramatic turnaround for the world's worst-performing stock market between 2010 and 2013. By yesterday, the key stock gauge, despite sessions of precipitous drops, was still 19.9 per cent higher than the close on November 19. "Buying stocks on margin is a popular idea among the small investors as they believe the rally will be sustained for at least a few months," said Haitong Securities analyst Zhang Qi. "But active short selling will probably take place soon as they keep betting on market volatility." Last week, the regulator warned investors of potential risks in chasing the rally. The coming probe is understood to be a message to investors that it is risky to use leveraged funds for stock purchases.