Investors look downcast at a brokerage house in Fuyang city, East China's Anhui province, July 28, 2015. [Photo/IC]

Stocks fell amid volatile trading on Tuesday, extending the biggest one-day loss in eight years, as concerns grow over the sustainability of the government-supported market rebound.

The benchmark Shanghai Composite Index retreated to 3,663 at close, down 1.7 percent after swinging nearly 230 points, while the Shenzhen Component Index tumbled 1.4 percent to 12,316.78.

More than 300 stocks sank by the daily limit of 10 percent on Tuesday, led by technology and energy sectors.

Brokerages rebounded after an across-the-board decline on Monday. Guosen Securities and Soochow Securities jumped 10 percent. Orient Securities and Guotai Junan surged 9.2 and 8.4 percent respectively.

The China Securities Regulatory Commission (CSRC) has been following report leads and investigating into "intensive share dumping" on Monday, announced the securities watchdog via its official microblog on Tuesday afternoon.

The Shanghai gauge dived 8.5 percent on Monday, when latest statistics posted by the National Bureau of Statistics showed profits at major industrial firms dropped 0.3 percent year-on-year in June, down from a 0.6 percent growth in May.

The rout put an end to a six-day rally after the Shanghai gauge rebounded 16 percent from its July 8 low through Friday, as regulators took a string of moves to shore up the market, which included suspending initial public offerings, banning major shareholders from selling, investigating into "malicious" short-selling and granting government agency liquidity to help finance stock purchases.

"China Securities Finance Corp hasn't exited the market and is looking for opportunities to buy in to continue stabilizing the market," said the CSRC spokesman Zhang Xiaojun on Monday night.