The eye-watering jump in shares of Xinjiang Tianshan Animal Husbandry Bio-Engineering Co attracted the attention of the official Xinhua news agency, which used the company to warn about the risks of chasing speculative gains in an editorial this week, sparking a broader sell-off.

That marked a sharp correction for Shenzhen's Nasdaq-style ChiNext board, just weeks after the introduction of listing reforms on the tech-focused start-up board triggered a meteoric run up in prices.

At Friday's close, ChiNext was down more than 7% for the week, its biggest weekly loss since March.

"Wave after wave of investors have placed themselves in a dangerous game of hot potato," the Xinhua commentary warned.

The increased regulatory scrutiny comes as the Shanghai bourse prepares to review Alibaba backed Ant Group's application for a local IPO, part of an up-to $30 billion dual listing the company is seeking in Hong Kong and China's STAR Market.

Trading in shares of Tianshan was halted on Wednesday.

"It's really sending retail investors to the slaughter," an investor on the trading community app Xueqiu wrote about Tianshan on Friday, under a post speculating about the resumption of trading.

The STAR 50 index of companies on Shanghai's Nasdaq-style STAR Market was down more than 5.5% for the week, its fifth straight week of losses.

A record 63 companies conducted A-share IPOs in August, state media CCTV Finance reported, as firms rushed to take advantage of investors' enthusiasm for new listings.

"There are many companies with poor fundamentals in the market, while the pace of new listings has been rapid, putting a flurry of new companies onto the market without sufficient investor protection," said Pei Guilin, CEO of Yixing Heze Asset Management in the coastal province of Jiangsu.

Pei said the ChiNext plunge is unlikely to directly affect the Ant IPO, but said he has low expectations from the company. One reason new listings have fallen below their IPO prices was because they were priced excessively high, he said.

"It was just a matter of time before ChiNext slumped," said Pei.

By Andrew Galbraith and Luoyan Liu