China's previously climbing Shanghai Composite has dropped by 7.4% at close on 25 June, the biggest one-day loss in over five months.
Investors and analyst said the fall might have been the end of the eight-month rise experienced by the index, the benchmark for all stocks on the Chinese Stock Exchange, rather than just a small dip.
In an analyst note, IG market strategist Stan Shamu said the reasons behind the fall "stretch far and wide, including deleveraging, frothy valuations and extreme volatility causing nervousness", NCBC reported.
He added: "While some markets in the region seem to have ignored some of the wild swings in China for a while, it's now certainly casting a shadow on some key markets."
The fall came despite the initial public offering of China's third-largest broker, Guotai Junan, whose shares rose up to the maximum limit of 44% and should have boosted the markets.
The Independent reported that around 2,000 of the total 2,800 companies listed in mainland China fell by 10% – the index's falling limit.
The Shanghai Composite hit its highest point in years of 5178.19 on 12 June and has since lost 19%. Healthcare and technology companies were among the biggest fallers.