Asian stocks have dived to three-year lows this morning, continuing stock market slides which plundered values worldwide last week on fears for China’s economy.
Monday saw the Shanghai Composite tumble 6.2% to 3,289 in early trading, having lost more than 10% already this month.
Hong Kong’s Hang Seng index fell 4.2% to 21,475.
Japan’s Nikkei 225 stock index dropped 2.5% to 18,956.
Australia slid 2.5%t to 5,084.
South Korea’s Kospi lost 0.5%.
Takako Masai, the head of research at Shinsei Bank in Tokyo, said: “Markets are panicking. Things are starting look like the Asian financial crisis in the late 1990s.
“Speculators are selling assets that seem the most vulnerable.”
Qi Yifeng, analyst at consultancy CEBM, said: “The market is in a downtrend. There’s no good news, stocks are still expensive, and there’s no fresh money coming in.”
Even before the Chinese markets opened, stocks in Asia took a beating after fears of a China-led global economic slowdown drove US stocks to their steepest one-day drop in nearly four years on Friday.
The FTSE 100 endured its worst week of trading of 2015, losing 5.5% by Friday. It meant that £93bn was wiped from the value of the index.
Financial spreadbetters expected the London market to open 3.5% lower on Monday – taking the FTSE 100 below the 6,000 point barrier.
While China took the spotlight, analysts pointed to other fundamental factors at play in the share slide.
“On the surface it would be easy to point the finger at slowing China growth, falling oil prices and emerging market currency wars as the reason why global equity markets have fallen sharply through the summer,” wrote Sean Darby, chief global equity strategist at Jeffries.
“However, a mix of disinflation and deflation forces, a tightening in global monetary conditions and deteriorating profits in emerging markets are much greater factors.”