China shares collapse sparks panic-selling in Asian markets
Stocks have tumbled across Asia, with China's main index losing 8.5% in tumultuous trading as investors panicked by economic uncertainty unloaded shares in practically every sector.
The Shanghai composite index slid to 3,209.91 as many China-listed companies hit their 10% downside limits.
The benchmark has lost all of its gains for 2015, though it is still more than 40% above its level a year ago.
Angus Nicholson, a market analyst for IG, said: "It is a key moment for China. The equity market in free fall, the banking system increasingly starved of liquidity, rising capital outflows, and a rapidly slowing economy.
"Global markets look set to continue their rout into the European and US. sessions," he added, noting that the scale of the losses may have been exaggerated by the thin trading volumes typical in late August.
The bloodletting spread across Asia, as Hong Kong's Hang Seng index fell 5.1% to 21,278.21 and Japan's Nikkei 225 stock index dropped 4.6% to 18,540.68. Australia's S&P ASX/200 slid 4.1% to 5,001.30, while South Korea's Kospi lost 2.5% to 1,829.81.
Fresh evidence of the slowdown in China's economy sparked a wave of selling Friday in Europe and the US that culminated with the S&P 500 losing nearly 6% for the week in its worst weekly slump since 2011.
The release of a key gauge of manufacturing, a purchasing managers' index, or PMI, fanned fears over weakening demand spilling over into other markets, especially resource-dependent emerging economies that export to China.
Some analysts say they see huge opportunities for bargains in the latest plunge in prices. But underlying the gloom is the growing conviction that policymakers and regulators may lack the means to staunch the losses.
Rajiv Biswas, Asia-Pacific chief economist for IHS, said: "My biggest concern is that global growth momentum is very fragile. The most important step is to see China take further action to try to bring their economy to a 7% growth path."
With no sign of fresh market support from Beijing, Dow futures were down 2.45% late Monday Asian time while S&P futures were 2.3% lower.