This is a known issue. Add following CSS class to your page.
.IE8Fix
{
z-index:100;
}
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And, apply that CSS to your menu’s DynamicMenuStyle.
<asp:Menu ID="ApplicationMenu" runat="server" Orientation="Horizontal">
<DynamicMenuStyle CssClass="IE8Fix" />
</asp:Menu>
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Credit goes to km Web Solutions.