China stocks ended lower in a volatile session on Tuesday, even as Beijing pledged to lend further support after stocks sank 8 per cent in the previous session, raising concerns about financial stability in the world's second-biggest economy.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen ended 0.2 per cent lower, at 3,811.09, while the Shanghai Composite Index lost 1.7 per cent, to 3,662.82 points.

Both indexes had lurched between losses as deep as 5 per cent and gains of more than 1 per cent.

Chinese regulators said they were prepared to buy shares to stabilise the stock market, while the central bank injected cash into money markets and hinted at further monetary easing.

"Instead of jumping in to buy stocks, investors liquidated their positions and took to the sidelines when they saw not much room on the upside," said Alex Wong, a director at Hong Kong-based Ample Finance Group.

The People’s Bank of China said on Tuesday it would inject 50 billion yuan ($8.05 billion) into money markets in its biggest liquidity boost since July 7th, near the trough of the last market sell-off.

The central bank also said it would use “various monetary tools” to maintain “appropriate levels of liquidity”, a signal that further monetary easing predicted by many analysts could be in store.

Nomura said current consolidation provide another attractive entry into A-shares if investors has missed lows in early July.

Hard activity data including industrial production, retail sales and investment have started to pick up in the second quarter, suggesting the real economy is improving, Nomura said in a research note on Tuesday.

Reuters