According to the Shanghai Stock Exchange, the outstanding balance of margin credit that bankrolled stock-trading has increased to a record 1.27 trillion yuan ($204 billion) as of Thursday.

Bet ahead

Views among investors, especially retail ones, are diverging as to whether they should take the chance to buy low or cautiously profit earlier gains or cut losses for late comers.

The year-long rally in the A-share market came amid the slowdown of China's economy. The country's gross domestic product grew at a six-year low of 7 percent in the first quarter. The full-year rate was 7.4 percent in 2014.

Construction, utility, coal and financial stocks reversed part of earlier gains in the recent decline, as the economy saw slump in industrial production and real estate construction.

Finance Minister Low Jiwei warned at a forum in April that China has a "greater-than-50-percent" chance of falling into the middle-income trap in the next five to 10 years.

However, US famed investor Jim Rogers expresses his unfaltering confidence in the China market in an interview with Yahoo Finance, saying he is "absolutely" still as bullish on China today as he was back in 2007.

The 73-year-old bigwig said he is not too concerned with the bubble that the market is beginning to form and China today is like the US at the 20th century, according to the news. "If you sold your American stocks in 1915, you might have looked smart for a while but you would've looked pretty foolish over the next 80 years."

Commenting on China's stock market, Warren Buffett said earlier this month that there might be more speculative influences in the country because it was a relatively new investing environment, according to Reuters

Charlie Munger, Buffett's second-in-command and Berkshire Hathaway's vice chairman, added that he believed China would be better served by taking a value analysis approach.