Markets tremble as Chinese shares tumble

Asian markets tumbled further as fears about a slowdown in China’s economy deepened, confirming that last week’s market volatility has not yet abated.

In recent weeks, stocks, currencies and commodities have swung dramatically on signs of a slowdown in Chinese growth. Disappointing economic data out of the world’s second-largest economy, as well as the country’s devaluation of its currency, have exacerbated concerns.

On Tuesday, data suggesting China's manufacturing sector was shrinking at its fastest pace in three years ignited a global market sell-off, resulting in US stocks closing down nearly 3%. Meanwhile, shares in Europe and the US also posted losses, with the price of oil, which had rallied in recent days, slumping further.

The Shanghai Composite recovered some ground to trade down 3.6% to 3,054.17.

Hong Kong's Hang Seng index was lower by 1.7% to 20,818.22 in early trade.

Chinese markets close on Wednesday evening for a two-day holiday to commemorate the end of World War Two.

Mainland Chinese stocks have lost nearly 40% of their value since June, despite attempts by the government and regulators to prop up the market.

Meanwhile, data showing US factory activity fell to a more than two-year low in August added to the already grim sentiment among investors.

Crude oil futures also continued downwards after an 8% fall in US trade, amid concerns about slowing demand from China.

Rest of Asia

Japan's benchmark Nikkei 225 index was up 0.8% to 18,296.67 after leading the region's losses in the previous session, down nearly 4%.

Australia's S&P/ASX 200 was lower by 1.2% at 5,036.60 points as economic growth figures for the second quarter came in below expectations.

The economy expanded 0.2% from the previous quarter and was up 2% compared with the same period last year.

Economists were expecting quarterly growth of 0.4% while the annual rate was forecast to be up 2.2%.

In South Korea, shares were also lower after government data showed exports fell 4.3% in July, while imports rose 0.7%.

That led the current account surplus to fall to $9.5bn (£6.2bn) in seasonally adjusted terms from a record high of $10.7bn in June.

The benchmark Kospi index was down 0.3% at 1,908.50.