An investor stands in front of a screen displaying stock indices and prices of shares, as stock index plunged 8.46 percent, at a stock brokerage house in Yichan city, China's Hubei province, Aug 24, 2015. [Photo/CFP]

With small investors dominating the stock market in China, it's the individual investors who have been the hardest hit by the sharp fall.

The benchmark Shanghai Composite Index dived as much as 9 percent before closing at 3,209.91, down 8.5 percent on Monday. The gauge lost 12 percent last week, despite the State Council granting pension funds access to equities for the first time over the weekend.

Unlike stock markets in the United States and other developed economies, individual investors dominate Chinese stock market; with many of them putting their life saving into it. According to data from China International Capital Corp, small investors hold about 80 percent of outstanding shares of public companies.

Stock market rout dealt a crippling blow to the emerging middle class in China. Since the start of market plunge after it hit peak in mid June, Chinese investors have suffered a loss of 6.8 trillion yuan ($1.1 trillion).