SHANGHAI (Reuters) - China's stock regulator will inspect the stock margin trading business of 46 companies as part of what it called normal supervision, the official Xinhua news agency reported late on Wednesday.

Three sources told Reuters on Wednesday that Chinese regulators would launch a fresh investigation into stock margin trading, and banks have been told to tighten lending supervision to avoid loans being funnelled into stock markets.

"The inspection belongs to normal regular supervision and should not be over-interpreted," the China Securities Regulatory Commission told Xinhua.