Despite signs in China of slowing economic growth and a slumping property market, the mainland’s stock markets have been resurgent in recent months, with the Shanghai Composite Index up almost 50 percent since July. On Monday, the index pushed above the 3,000-point level for the first time since early 2010.

On Tuesday, the Shanghai index showed its first signs of stress, plunging in the afternoon trading session to close 5.4 percent lower, at 2,856.27 points. The benchmark index for the Shenzhen Stock Exchange also fell, closing 4.2 percent lower.

Still, analysts were reluctant to describe Tuesday’s sell-off as an end to the rally, since broad sentiment among Chinese investors remained positive toward share markets, given the relative weak performance of other popular investments, like residential properties.

“Although the recent rise in leverage sharply heightens the risk of extreme volatility, with a near-term 10 percent correction in the Shanghai market perfectly possible — even likely — there are good reasons to believe that Chinese equities have now moved into a new, more bullish phase,” Joyce Poon, an analyst at Gavekal Dragonomics, a financial research company, wrote on Tuesday in a research note.

“If the stock market’s credit line is not yet maxed out, the question for investors is whether Beijing is likely to pull the plug and kill the party,” Ms. Poon wrote. She cited the surprise interest rate cut last month by the Chinese central bank as an example, saying that a monetary policy that supports growth also augurs well for equity markets.

“While the authorities are undoubtedly concerned at the rapidity with which leverage has built up,” she wrote, “there is no doubt that they would welcome a sustainable bull market in stocks as positive for sentiment and for growth.”

While major stock markets around the world have soared to post-financial crisis highs in the last year, China’s markets had remained languid. Instead, Chinese investors, who are largely confined to domestic investments because of the country’s currency controls, had opted to park their money in the property market or alternative instruments like high-yielding wealth management products. But real estate prices have been falling across the country in recent months, and the returns on wealth management products have also declined.

Retail investors in China opened 370,000 stock trading accounts last month, the highest monthly total in more than three years. And many are buying shares on credit. Since July, the amount of share purchases in Shanghai and Shenzhen that used margin financing more than doubled, rising to more than 800 billion renminbi, or $130 billion, by the end of last week.

The result has been a sharp run-up in stock prices. In the last six months, the Shanghai index has ranked as the world’s best performing share index. Before the sell-off on Tuesday, it had risen 25 percent in the last month alone.

While welcoming signs of life in the country’s stock markets, Chinese officials have grown wary in recent weeks of the rising levels of debt that have fueled the rally, and they have cautioned investors against speculation.

Deng Ge, a spokesman for the China Securities Regulatory Commission, said regulators had noted a rise in market manipulation and other illegal trading activities. “We will strengthen market supervision and resolutely crack down to safeguard normal market order and protect the legal rights of investors,” Mr. Deng said in a statement on the regulator’s website on Friday.

“I hope the majority of investors, especially small investors, will invest rationally, respect and revere the market, and remember that stocks have risks,” he said. “Don’t be misled or blindly follow speculators.”