The detention of a high-profile Chinese fund manager stirred the country's equities investment sector on Monday, underscoring the intensified government crackdown on illegal activities in the volatile Chinese stock market.

Xu Xiang, general manager of the Shanghai-based private equities firm Zexi Investment, has been detained and is being investigated by the police on suspicion of insider trading and market manipulation, Xinhua News Agency reported, citing the Ministry of Public Security.

Xu's detention came as the country's securities watchdog stepped up the effort to eradicate illegal trading after the stock market experienced a dramatic fall that wiped out $5 trillion in market value during the summer.