SHANGHAI - China's main stock index plunged at the opening on Tuesday and then swung widely as investors continued to dump stocks after last week's hike in the share trading tax.
The Shanghai Composite Index opened down 2.89 percent, briefly rebounded into positive territory and then resumed sliding. After 15 minutes of trade it stood 2.02 percent lower at 3,596.324 points, a level not seen since April 20.
The index has now tumbled 17 percent since the tax hike, which was designed to cool rampant speculation by individual investors.
China's securities regulator has approved four new mutual funds that will invest in the stock market, sources close to the regulator told Reuters late on Monday. The approvals were widely seen as an effort by authorities to restore investor confidence.
But large-cap blue chips remained soft early on Tuesday, suggesting that not only individual speculators but also some institutional investors were selling to cut losses.
Heavyweight oil refiner Sinopec was down 0.73 percent at 13.55 yuan, after earlier plunging 4.2 percent.