Although the two exchanges did not implement the rule of suspending trading on shares with "abnormal price fluctuation" last week, at some 310 stocks in total, they couldn't quite stop investors from "panic" selling today.

The benchmark index has diminished 664 points in merely four trading days from the 4,334.92 by Tuesday's closing. Last week's plunge in the stock market has already shaken off 5 percent in terms of capitalization to 17.21 trillion yuan on Friday. Today's pending result is surely even more ugly.

Analysts have said the slump was temporary and that won't reverse the "bull" run in the stock market. But there is no sign of fading-off of the impacts by the hike in stamp tax, from today's big drop.

Even worse, funds on the two markets started falling, this might be a very dangerous sign, said experts. In the past, funds were usually resistant to the falling waves of the A shares, but today they also dived deep. This might trigger investor's withdrawing from funds, which holds large proportion in their portfolio in high-performing, index-driving blue chips. And if investors sell funds for refunding, a major part of the last hope to lift the index and the whole market will get dim, said analysts.

But the regulators do not want that to happen and are trying to implement more "market-oriented" measures. The China Securities Regulatory Commission (CSRC), for example, has announced that China West Mining Co Ltd will be examined and voted for an initial public offering (IPO) by the commission tomorrow.

West Mining initially planed to list in Hong Kong, but was recommended to make its IPO on the Shanghai exchange last month after it had submitted its application to the Hong Kong Stock Exchange. This implies that CSRC is trying to speed up IPO processing and bring more capital outflow outlets back to the domestic market, after the mere three IPOs in May, analysts said.

"Measures focused on demand and supply of capital could generate better results than the one-off fiscal policy change," said an analyst. But on the other said, seeing the biggest dives recently, the Ministry of Finance might be more cautious to decide to introduce the capital gains tax, he believed.

"To look at the bright side, if the rise in stamp tax, although causing enormous turbulence to the market, may eventually prevent the policy makers from issuing a too 'aggressive' measure, it is worthy then," said the analyst.

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