China stocks tumbled on Friday, capping a brutal week that was the worst for main indexes since the global financial crisis as the country's dramatic eight-month bull run appears to be running out of fuel.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen plunged 6.0 per cent, to 4,637.05, while the Shanghai Composite Index lost 6.4 per cent, to 4,478.36 points.

For the week, both indexes were down over 13 per cent, the biggest weekly drop since 2008.

This week's panic sell-off — only interrupted by a feeble rebound on Wednesday — was triggered by fresh government moves to tighten margin financing, and worsened by a tidal wave of initial public offerings that sapped liquidity.

And signs of improvement in the real estate market — home prices in May rebounded for the first time in 13 months — are causing fears that the government may no longer be eager to pump money into the economy.

"Recently, elements that curb the market's rise are emerging," Bosera Asset Management Co said in an emailed comment on the correction.

"First... room for further monetary easing could be less than anticipated, and inflows of new investors could have peaked. Secondly, a highly-leveraged bull (market) is not sustainable."

A more-than-doubling of China's stock market, in the backdrop of a slowing economy, was largely liquidity driven, and propelled by margin loans which Bosera estimates have reached between 3 trillion and 4 trillion yuan ($643.7 billion).

Any harsh tightening of margin debt, or weaker-than-expected monetary easing measures could cause the market to fall as fast as it rose, analysts say.

Stocks fell across the board.

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