China's main share indexes hit another seven-year high on Wednesday, as investors dumped small-cap stocks and shifted money into blue chips.
The CSI Financials index rose nearly 3 per cent, but the Nasdaq-style ChiNext board at one point was down more than 4 per cent from record highs, before reclaiming some losses to end off 2.2 per cent.
After last month's bull run, mainland stocks face tighter liquidity, as well as rising pressure of profit-taking, according to Qi Yifeng, analyst at consultancy CEBM Group Ltd in Shanghai.
There are signs mainland investors are increasingly interested in Hong Kong stocks.
On Wednesday, Chinese investors used the entire 10.5 billion yuan ($1.69 billion) daily investment quota that allows them to buy Hong Kong stocks under the Hong Kong-Shanghai Stock Connect scheme.
It was the first time the daily southbound quota has been fully taken up since the scheme was launched in November.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.8 percent, to 4,295.80, while the Shanghai Composite Index gained 0.9 per cent, to 3,994.81 points.
Among the most active stocks in Shanghai were Bank of China , up 1.6 percent to 4.54 yuan; Agricultural Bank of China, up 1.1 percent to 3.81 yuan and Everbright Bank, up 4.2 percent to 5.26 yuan.
In Shenzhen, BOE Technology, down 1.9 percent to 4.21 yuan; Hebei Steel, up 0.4 percent to 5.00 yuan and Shenwan Hongyuan, up 7.0 per cent to 19.18 yuan were among the most actively traded.
Total volume of A shares traded in Shanghai was 61.6 billion shares, while Shenzhen volume was 36.1 billion shares.