China's central bank on Tuesday said investor expectations and sentiments resulted in the recent fluctuation in the financial market.

"We have noticed some volatilities in the financial market recently, mainly affected by investor expectations and sentiment," said the People's Bank of China (PBOC) in a statement.

Chinese major stock indices dropped by over 5 percent on Monday and further slipped on Tuesday. The benchmark Shanghai Composite Index closed at 2,886.43 points, the lowest point since June 2020.

The bank said it will increase support for the real economy with a prudent monetary policy after the General Office of the State Council called for the same move a day earlier.