Chinese equities remained volatile Tuesday following an initial stampede out of the market, with analysts cautioning that there is no clear end in sight to the drama.
"China is probably one of the most, if not the most, margin financed markets of all time – so comforting yourself that the unwind is done – because we've seen a lot of that unwind in the past couple of weeks - is probably somewhat premature," Chris Konstantinos, director of international portfolio management at Riverfront Investment Group, told CNBC.
"[Also], I still don't think you're at a position where you've really got a lot of valuation support," he added.
The benchmark Shanghai Composite opened down over 4 percent on Tuesday, swinging between losses and gains over the course of the morning session, as investor sentiment remained shaky despite a fresh commitment by Beijing to put a floor under the market. The index traded down as much as 5.1 percent.
"The market sentiment is extremely fragile so when investors see selling pressure, they compete to sell their stocks," Dickie Wong, executive director at Kingston Securities, told CNBC.
A day earlier, Shanghai stocks nose-dived 8.5 percent, their biggest one-day decline since 2007, on heavy margin selling amid concerns that authorities were starting to scale back on measures to prop up stocks.
The monstrous fall that caught many investors off guard, however, prompted regulators to once again vow their support for the beleaguered market.
Following the market close on Monday, the country's securities regulator said it was prepared to purchase shares to calm the market and stave off systemic risks, Reuters reported. It also said authorities would deal severely with anyone engaged in the "malicious shorting of stocks."
On Tuesday morning, the central bank used reverse-repurchase agreements to pump 50 billion yuan into the banking system – the largest amount of funds through open market operations since July 7 – and said it would use various monetary tools to maintain appropriate levels of liquidity, according to Reuters.
So far, policy intervention aimed at shoring up investor confidence has had only a short-lived effect.