Chinese main stock index fell nearly 3 percent on Thursday as profit-taking in richly valued financial blue chips continued, though Ping An Insurance staged a fairly strong debut.
The Shanghai Composite Index, which plunged 8.84 percent on Tuesday in its biggest drop in a decade before rebounding 3.94 percent on Wednesday, ended 2.91 percent lower at 2,797.190 points.
The index came off an intra-day low of 2,760.912. Losers outnumbered gainers by 643 to 233, while turnover in Shanghai A shares was an extremely heavy 105.8 billion yuan ($13.7 billion).
Analysts said the readiness of investors to sell financials right after Wednesday's rebound showed those stocks might have considerably more room to fall, which could drag down the index a further 10 or conceivably 20 percent in coming weeks or months.
Standard & Poor's Equity Research said Chinese A shares were still overvalued, making a further "downward consolidation" likely. Barclays Wealth Asia strategist Philip Niem estimated that "a further 10 percent correction in A shares is justified".
Industrial & Commercial Bank of China, the biggest stock in the index, tumbled 3.06 percent to 4.75 yuan in response to weakness in its Hong Kong-listed H shares over the past two days. Ping An's bigger rival, China Life Insurance, still viewed as one of China's most overvalued financial stocks, sank 5.21 percent to 34.00 yuan. But Ping An, China's second biggest life insurer, attracted healthy interest, opening at 50.00 yuan, 48 percent above its initial public offer price, and hitting a high of 50.97 yuan. It closed up 38 percent at 46.79 yuan. Shanghai Auto, China's biggest car maker, rose 1.52 percent to 13.32 yuan.