Dennis Gartman, founder and editor of the closely-watched The Gartman Letter, disagreed with Seneca Investment Managers's Elston, however, arguing that Tuesday's move was likely to be a mere blip in a trend higher for the Chinese market.
"I will allow other people wiser and brighter than I to be involved with the Chinese stock market right now, but clearly the trend is still upward," Gartman told CNBC Tuesday. "Weakness is to be bought and strength is not to be sold."
Kerry Craig, market strategist at J.P. Morgan Asset Management, said that investors should not be surprised by the sharp fall, given that the market has rallied 20 percent in the last few weeks. He told CNBC Tuesday that it should be put down to "profit taking" by traders, who are "taking a bit off the top" as the rally has extended too far.
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The worst performers on the Shanghai Composite included engineering company the Qingdao Tianhua Institute, which fell 10 percent. Machinery manufacturer CITIC Heavy Industries and goods trading firm Langfang Development also saw similar losses.
Back in Europe, the basic resources sector – which has heavy exposure to China, the world's second-largest economy - saw a drop of over 2 percent.
Energy stocks were also under pressure as oil prices hit new five-year low. Brent crude is now below $66 a barrel and has lost around 40 percent since July. Heavily-weighted stocks like BP and Total were trading lower by around 1.5 percent on Tuesday morning.