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SHANGHAI, Aug 20 (Reuters) - China stocks tumbled again in late trading on Thursday, underscoring fragile investor confidence in the market as worries about the world's second-largest economy persist.
Trading volumes were thin, suggesting many investors stayed on the sidelines.
Shares were marginally lower in the morning, as statements by a slew of companies that the government had invested in them boosted some counters. But in mid-afternoon, prices began to drop.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 3.2 percent, to 3,761.45, while the Shanghai Composite Index lost 3.4 percent, to 3,664.29 points
The SSEC is now down about 7 percent since China devalued the yuan by nearly 2 percent on Aug. 11.
On Wednesday, the indexes had reversed sharp losses to end higher, as roughly 30 Chinese listed companies, many small caps, disclosed holdings by government-backed investors in an apparent attempt to sooth market panic following the previous session's 6 percent tumble.
"Even as the government has the will to put a floor under the market, whether it has the ability to do so is in doubt," said Hou Yingmin, analyst at AJ Securities, citing adversities including an anaemic economy, capital outflows and ugly technical patterns.
"Without fresh money inflows, any rebound is not sustainable."
Most sectors fell, with transport and real estate shares leading the decline.
Analysts have said further yuan depreciation would trigger fresh capital outflows, putting pressure on the property market.
But investors nevertheless bet on companies with investments from state-backed investor Central Huijin, and state margin lender China Securities Finance Corp (CSFC), which was tasked with propping up share prices during crisis.
Companies including textile dyes maker Shanghai Anoky Group , optical product maker SVG Optronics Co Ltd and Shanghai Taisheng Wind Power Equipment Co jumped after they disclosed investments by Huijin. (Reporting by Samuel Shen and Pete Sweeney; Editing by Richard Borsuk)