China's stock market has slid 26 percent this year, making it one of the

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world's worst performing markets and raising questions whether authorities may take action to prevent the market from tumbling much more sharply.

A crackdown on the country's red-hot real estate sector combined with a money market squeeze due to a flood of share issuances -- including Agricultural Bank of China's ABC.UL record $22 billion offer -- have driven the Shanghai Composite Index .SSEC to 15-month lows.

The government, already facing rising worker unrest, high property prices and inflation concerns, will likely want to avoid drawing the ire of Chinese investors watching their savings dwindle in the country's volatile market. But so far the market drop is not severe enough to prompt action.

Below are some scenarios on how officials may intervene against a further market drop. Chinese officials have historically taken measures in the stock market, both to limit big surges and slides.

Unless the index falls below 2,200 points from the 2,413 level at midday on Thursday, Chinese authorities are unlikely to do anything to stop the market from falling, analysts said.

Officials may also be happy to have taken the steam out of the stock market in the past year by unleashing IPOs and cracking down on the money going into the stock market, especially from bank lending. In the first half of 2009, the Shanghai market soared more than 60 percent.

After the property market restrictions prompted household investors -- the biggest force in the market -- to shed shares, tight money market conditions have only made things worse.

The benchmark money market rates have soared as banks have had trouble raising funds due to the squeeze, limiting the ability of investors to borrow and forcing them to dump shares to raise cash.

But analysts are confident for now that the market can absorb the incoming rights issues without sliding to levels that would make officials nervous.

Now that AgBank's blockbuster issue is just over, some of the money that failed to win in the subscription process is expected to go back into stocks. AgBank has also given confidence to the other major state-owned banks about raising funds now.

In the past few days Bank of China (601988.SS) and Industrial and Commercial Bank of China (601398.SS) are both reported to be preparing rights issues, but the news has made few waves in the shares -- suggesting investors have expected these funding needs.