We investigate the many-body dynamics of an effectively attractive one-dimensional Bose system confined in a toroidal trap. The mean-field theory predicts that a bright-soliton state will be formed when increasing the interparticle interaction over a critical point. The study of quantum many-body dynamics in this paper reveals that there is a modulation instability in a finite Bose system correspondingly. We show that Shannon entropy becomes irregular near and above the critical point due to

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... ntum correlations. We also study the dynamical behavior of the instability by exploring the momentum distribution and the fringe visibility, which can be verified experimentally by releasing the trap