Stocks dived for a fourth time over the past week to three-month low, as central bank's vow of liquidity support failed to restore market faith.
The benchmark Shanghai Composite Index dived 5.9 percent to close at 3,507.19, while the Shenzhen Component Index closed at 11,040.89, down 2.9 percent. The CSI 300 gauge dipped 6.8 percent.
Nearly all sectors, ranging from Internet to healthcare, from food beverage to real estate, tumbled on Wednesday, with about 1,000 stocks declining to a daily halt.
Stocks that slumped by 10 percent include the markets' blue-chips Sinopec, Bank of Communications, Haitong Securities and CITIC Securities.
The combined daily turnover reached 1.1 trillion yuan, as data from Shanghai exchange showed the outstanding balance of margin trading fell by a record of 98.3 billion yuan to 1.05 trillion yuan.
Propping up measures
Minutes after the Shanghai gauge slid 7 percent at the opening, the People's Bank of China announced it will provide "ample liquidity" to help stabilize the country's stock market.
The central bank will actively assist China Securities Finance Corp, a State-owned facilitating margin loan service among brokerages, to obtain ample liquidity through channels including loans and bonds, it said in an open statement.
"The PBOC will pay close attention to market moves and do whatever it can to prevent systemic risks."
It was the first time the central bank made voice since the rout, as the Shanghai gauge retreated more than 30 percent from its June 12 peak.
China's insurance regulator also vowed to join the authorities to stem the market plunge, by easing rules for insurance companies to invest in the stock market.
Qualified insurers will be allowed to invest 40 percent of their assets into equities, increasing from the previous 30 percent stipulation, said the China Insurance Regulatory Commission in a notice, to promote the stable and healthy development in the capital market.
China Financial Futures Exchange (CFFEX) announced on Wednesday that it will raise the margin requirements for sell orders on CSI 500 index futures to curb speculation.
Traders are asked to pay margin requirements equivalent to 20 percent of the contract value, starting from Wednesday's clearing, up from the previous 10 percent.
The margin requirement will be further elevated to 30 percent from Thursday.
The move came after CFFEX said on Monday night that it would limit investors' daily purchases of CSI 500 index futures to 1,200 lots for rise and fall.
The State Council ordered the suspension of new public offerings over the weekend to unleash liquidity, while brokerages and executives from 25 mutual funds as well as social security fund vowed to buy stocks.
Over one-third of the companies listed on the Shanghai and Shenzhen exchanges were suspended from trading.
