Stock market services company, Wind, said the majority of the companies had suspended their shares ahead of major news announcements, while the others were embarking on a restructuring.

While the suspensions have not been directly ordered by the stock market regulator, they appear to be another attempt by authorities to shore up the markets. Smaller companies listed in Shenzhen have been the hardest hit during the three week stock market route.

"If the government can credibly create a floor in the market then private investors might do the rest," said Michael Pettis, a professor of finance at Peking University, via phone from Beijing.

"And you need to remember the government has a lot of fire power."

Mr Pettis also questioned the idea that a big decline in the share market would affect the broader economy.

"On the way up there were limited side effects on the economy and the effects are likely to be limited on the way down," he said.

China's central government has rolled out a series of policies to stabilise the Shanghai and Shenzhen markets over the last three weeks, after they lost a quarter of their value amid panic selling and wild fluctuations.

These measures have seen the halting of 28 initial public offerings, allowing the country's sovereign wealth fund to buy local shares, having the central bank provide liquidity for margin lending and forcing stock brokers to create the 120 billion yuan market stabilisation fund.


On Monday independent media group Caijing reported the National Social Security Fund had ordered its fund managers "not to sell a single share". The state-pension fund had $159 billion of assets at the end of last year, split between bonds and equities.

On Monday the Shanghai Composite Index rose 2.4 per cent, but the rise in the overall market disguised big falls among smaller stocks not linked to the government.

In a wild day of trading, 649 stocks fell, while only 259 rose in Shanghai as the country's 90 million retail investors appeared unconvinced by the government attempts to engender confidence.

Traders indicated the 120 billion yuan ($25 billion) stabilisation fund set up by the country's main stock brokers began buying large government-linked stocks in the afternoon, leading the Shanghai market higher.

