SHANGHAI (BLOOMBERG, REUTERS) - China's Shanghai Composite Index plunged amid concern a raft of measures to stabilize equities is failing to stop the bear-market rout as traders unwind margin bets at a record pace.

The Shanghai Composite tumbled as much as 8.2 per cent, the biggest drop since 2007, before paring losses to 6.1 per cent to trade at 3,499.74 at 9:37 a.m. local time. The benchmark gauge has slumped 28 per cent since the June peak.

China's central bank said on Wednesday that it will support stability in the stock market and guard against systemic and regional financial risks.

The People's Bank of China will provide sufficient liquidity to China Securities Finance Corp, the state-backed margin finance company, via various channels, the central bank said in a statement on its website.

A wave of Chinese companies have halted trading in their shares as regulators unveiled new measures to prop up the value of small-cap stocks in the latest attempts to stem a rout that's wiped more than US$3.5 trillion (S$4.75 trillion) of value.

At least 1,249 companies have halted trading on mainland Chinese exchanges, locking up US$2.2 trillion of shares, or about 33 per cent of China's market capitalization.

The China Financial Futures Exchange raised margin requirements for sell orders on CSI 500 index futures, while China Securities Finance Corp. said it will buy more shares of small- and mid-cap companies.

The measures, which follow stock purchases by state- directed funds and interest-rate cuts by the central bank in recent weeks, failed to revive confidence among stock investors as the Shanghai Composite Index tumbled on opening.

Selling by leveraged traders is weighing on the market, with the outstanding balance of margin debt on the Shanghai Stock Exchange falling by a record 8.5 per cent on Tuesday.

"The market has failed," said Hao Hong, a China strategist at Bocom International Holdings Co. in Hong Kong. "The market has become less transparent, less efficient, and less fair."