SHANGHAI - Small investor Xiao Li is not ready to sell out of China's battered stock market, despite seeing the value of his holdings plunge as share prices suffered their biggest one-day drop in a decade.

"You have to be fearless. Yesterday, my portfolio lost over 10,000 yuan," said the 37-year-old, barely taking his eyes off a large board flashing red and yellow with price changes.

The former driver, who took up share trading in 1997 after losing his job several times, was among a crowd of investors huddled around flickering screens at a brokerage in Shanghai's high-rise Pudong financial district, scanning the board in hopes that their shares would bounce back from Tuesday's sell-off.

And many did -- the main share index rebounded by nearly 4 percent on Wednesday.

Even though investors are accustomed to China's volatile and immature markets, many were stunned by the scale of the sell-off.

Even in prosperous Shanghai, where the average annual income is still only just over $3,000, a loss of 10,000 yuan ($1,292) can be traumatic.

At least one big Shanghai hospital reported a surge in patients with heart problems.

"Normally we'd get five to 10 people in a typical morning, but this morning we got at least 20," said one doctor, who declined to give his name.

He said one patient shouted out: "I'm dying, not of a heart attack but because of China's stock market!"

HEART ATTACK

One 56-year-old investor, identified only as Lao Li, fainted in a trading house and was taken to hospital with a suspected heart attack after the stock slide, the Shanghai Morning Post reported.

"Medical experts remind investors that the middle and old aged who suffer high blood pressure or have a history of heart disease should not invest too much and should be aware of how much pressure they can take," it said.

The market's near 9 percent slide erased about $140 billion of value from Chinese shares, amid fears the government would crack down on speculation that had driven shares to record highs.

On Wednesday, Premier Wen Jiabao sought to reassure investors, saying financial market stability and safety was a priority for the government, Xinhua reported.

The government fears that investors could become a volatile force if too many suffer large losses.

But Beijing and its increasingly Western-educated technocrats also know that if China is to develop a stable, mature stock market, then government interference has to be restrained.

That's not an argument that impresses 72-year-old Mrs. Zhao.

"We don't know what happened to the stock market and there is no way for us to know," she said as she walked out of the brokerage for lunch at the midday recess. "They said it was rumours of new income tax regulations that prompted the fall."

Traders said the slide had not appeared to be triggered by any concrete news, and the official securities press moved swiftly on Wednesday to dismiss talk that the government was planning to tax stock gains.

Xiao Li blamed insider trading but insisted he would keep some of his 70,000 yuan in the market for now, despite a nagging concern that the lack of transparency could suddenly drag shares down again.

"But if this trend continues, I'll sell all my shares at the end of the year," he added.

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