On Wednesday, analysts said that they expected markets to see more frequent fluctuations within a narrow band. And fluctuate they did on Thursday.

China's A-share market suffered its worst blow since March 4, led by the fall of heavyweight banking shares after new rules issued by the China Banking Regulatory Commission were seen as bearish for the sector.

The Shanghai Composite Index dropped 2.82 percent, or 65 points, while the Shenzhen Component Index shed 2.88 percent.