At first, we thought it was a rainbow. But it was obviously not the usual rainbow. First of all, it was upside down. The usual rainbow is an arc arching just above the land, which you see when you see with the sun at your back. But we saw this one while facing the sun. In fact, it is an arc centred on the sun. I found out later it is a sun halo. It occurs when there is a very thin, high cloud composed of small crystals of the same shape and oriented in the same way. When the sun light was refracted twice (once entering and another when exiting) when it passes through the crystals in a certain way it got separated into its component colours. The sun halo is also called a 22 degree halo because the halo is 22 degrees from the sun - because the sunlight is bent 22 degrees by the refraction.
The phenomenon is similar to that which forms the rainbow. But the rainbow is formed by clouds of raindrops closer to the ground. And the sunlight goes through an internal reflection, together with a refraction entering the raindrop and another exiting. Combined, they bend the sunlight 318 degrees. Hence the sunlight is turned back towards the sun, and you have to see it with your back to the sun.
Then I realised that there is another halo with a much larger diameter outside the first one. The second halo was much fainter, just barely visible.
A moment later, the second halo became darker.
While the primary one turned fainter.
Another moment later, both were gone.
The whole episode lasted no more than a few minutes. But it was fun while it lasted. And I learned a bit of physics because of it (much of it I learned from Googling the Internet afterwards).
I am glad I went grave sweeping on Ching Ming Festival.