The biggest weekly fall in Chinese equities in seven years begs the question: is the party finally over? Benchmark indices have more than doubled since autumn last year and in recent months have looked distinctly bubbly by almost any fundamental measure. Calling the end of the market even after the Shanghai Composite Index's fall of 13.3 per cent this week might be rash, given it bounced back twice from sharp drops earlier this year, analysts say, and history might repeat itself, despite a recent poll by Morgan Stanley that found institutional investors the most bearish about China since 2013. Ivan Lee, an equities analyst at Tung Shing Securities, said investors should not worry as the authorities were behind the stock run-up and were now controlling its descent. "I suspect the government is quite happy," Lee said. "We all know the market is moving at the will of the leadership. They will be happy to see this movement." As one of the biggest beneficiaries of the stock market's rapid rise, Beijing has seen the value of state-owned enterprises soar, making it easier to swap debt for new capital, and at the same time boost consumer spending and household wealth levels. Worried the party was getting out of control, officials tried to cool the excitement by removing the margin lending punch bowl while this week playing down the likelihood of further liquidity-boosting reserve ratio cuts. The reliance investors have placed on the government to manage the markets means investors remain confident stocks will not crash like in 2008, when they more than halved. There was nothing really new that triggered the sell-off, said Brett McGonegal, the executive managing director at investment adviser Reorient Group, but instead it was "the culmination of negative sentiment creeping into the market". People were taking profits while the market paused, said McGonegal, who is still bullish on Chinese equities and sees a further 10 to 15 per cent upside before the end of the year as investors switch from frothy small-caps to state-owned blue chips. On a technical level, the markets are hinting at a rebound, according to the relative strength index, a measurement of whether an index is overbought or oversold. At 45.72 the blue chip CSI 300 index's 14-day RSI reads neutral, while the nine-day reading of 37.73 is closer to the 30 level that indicates an index is oversold. Unusually, the sudden shake-out had little impact on mainland Chinese firms listed in Hong Kong, suggesting some investors still had confidence in the market, trading the valuation gap by selling down A shares while buying H shares.