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SHANGHAI, Jan 5 (Reuters) - China stocks closed mixed on Tuesday in volatile trade, with indexes swinging into and out of negative territory as government support measures struggled for traction in afternoon trade.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.3 percent, to 3,478.78, while the Shanghai Composite Index lost 0.3 percent, to 3,287.71 points.
China moved to shore up shaky sentiment on Tuesday, a day after its stock indexes and yuan currency tumbled, rattling markets worldwide, but analysts warned investors to brace for more wild price swings, and the afternoon session highlighted the challenges Beijing faces.
Speculation circulated about government intervention by state banks to keep the CSI300 from declining more than 5 percent, which would have set off a newly implemented circuit breaker mechanism.
Small cap stocks, favoured by the retail investors who dominate transactions on Chinese exchanges, sold off sharply. (Reporting by Samuel Shen and Pete Sweeney; Editing by Sam Holmes)