Correction rumors abound following last week's sell-off

Tightening margin trading and excess valuations weigh on fragile sentiment

The steep decline in Chinese equities last week has sparked speculation among traders and analysts on whether the market is entering a "healthy" correction to the bull run or shows signs of a bear's return.

The stock market last week saw its worst weekly performance since 2008, with the benchmark Shanghai Composite Index falling 6.4 percent on Friday alone, bringing the total weekly loss to 13 percent.