Update | Shanghai and Shenzhen stock market pounded, dropping 9 per cent in last two days

China markets plunged again on Wednesday morning, with both the Shanghai and Shenzhen equity markets ringing up losses of over 9 per cent in the last two days.

Shanghai's index tumbled to 3,558.38 points, its lowest intraday level in over two weeks, before it recovered to close at 3,631.40, down 3.12 per cent from yesterday's close.

The CSI300 index of Shanghai-Shenzhen large cap stocks finished the morning trade at  3,741.40 point, down 2.196 per cent, or  84.01 points.

The Shenzhen Composite closed the morning session at 2,109.66, down 2.98 per cent, or 64.76 points. The NASDAQ-style ChiNext Price Index slips 3.07 per cent, or 76.98 points to trade at 2,427.19.

In Hong Kong, the Hang Seng Index finished midday at 23,232.76, down 1.03 per cent or 242.21 points. The China Enterprises Index (H-share index) tracking Hong Kong listed Chinese companies, closed at 10,611.11, down by 1.48 per cent or 158.94 points.  

“There is a lack of confidence from retail investors. Many of them are probably worried that short positions taken by futures traders over these days will post huge downward pressures to the market,” said Louis Tse, director of VC Brokerage.