China's shares took a wild ride Tuesday, darting between gains and losses before closing mixed, following a sharp selloff in the previous session, while other Asia markets retraced some declines.
In volatile trade, the Shanghai Composite closed down 8.55 points, or 0.26 percent, at 3,287.7 after rising as much as 0.95 percent and falling as much as 3.2 percent earlier in the session. The smaller Shenzhen Composite finished down 39.38 points, or 1.86 percent, at 2,079.77, while the CSI300 erased losses to end up 9.71 points, or 0.28 percent, at 3,478.78 after falling as much as 2.65 percent intraday.
In Hong Kong, the Hang Seng Index erased mid-morning gains to close down 0.65 percent.
In Monday's trading session, Chinese equities plunged after feeble manufacturing surveys revived concerns over the country's economic slowdown. The CSI300 dipped 7 percent in afternoon trade Monday, resulting in trade being suspended for the day. The Shanghai Composite had tumbled 6.8 percent and the Shenzhen Composite plummeted 8.1 percent Monday.
Goldman Sachs said in a note Tuesday that other factors cited as explanations for the sell-off include market concerns over near-term liquidity, capital outflows, monetary tightening and policy stimulus inaction.
During yesterday's sell-off, China tested out its new system-wide circuit breakers linked to the benchmark CSI300 index, dominated by large-cap stocks. When there is a 5 percent move in either direction in the CSI300 index, trading is halted for 15 minutes. When that index moves 7 percent, the market closes for the day. Hong Kong does not have a circuit breaker.