BEIJING, July 27 -- China Securities Finance Corporation, Ltd. (CSF) will continue to buy stocks to stabilize the market, the securities watchdog said on Monday.

Zhang Xiaojun, spokesperson with the China Securities Regulatory Commission (CSRC), made the remark after the benchmark Shanghai Composite Index experienced the sharpest daily drop since Feb. 27, 2007, dispelling rumors that the national margin trading service provider has backed off from stabilizing the stock market.

CSRC is investigating huge stock sell-offs by some individuals and will punish any malicious short selling, Zhang added.