Asia: Black Monday sees shares around the region tumble

China’s ‘Black Monday’ rattled global equity markets, with stocks tumbling the most since 2007 as recent government support measures failed.

The Shanghai Composite closed 8.49% lower, while the Shenzhen Composite was down 7.7% and the start-up focused Chinext was down 8.08%.

The latest move by the People’s Bank of China saw the central bank announce that local government-managed pension funds will be able to invest in the markets for the first time, in an attempt to pour billions of yuan into its equity markets.

FxPro chief economist Simon Smith said markets were likely to remain on edge for some action, either in the form of a rate cut or a cut in the reserve ratio for the bank.

The Shanghai Composite was the “continual epicentre” of the markets recent woes, Spreadex financial analyst Connor Campbell said, and had set off a chain of losses.

“The People’s Bank of China remains in ‘see what sticks’ mode, and so far nothing has been able to provide an adequate tourniquet for the market-wide bloodshed that has only intensified this Monday,” Campbell said.

China’s woes affected the rest of the region, with nearby Hong Kong’s Hang Seng exchange closing 5.17% lower, and Singapore’s exchange also closing down, by 3.74%.

Taiwan’s Taiex was down 4.84%, on Sunday Taiwan’s financial watchdog banning traders from short-selling stocks at lower prices than the previous day’s close.

Japan’s Nikkei 225 was down by 4.60% and the yen was at ¥ 120.45 to the dollar.

Down under Australia’s ASX 200 was caught in the sell-off, closing down 4.09%. Decliners were led by metals company Fortescue, followed closely by oil and gas producers Senex which was down 13.79% and Santos which was down 11.25%. The Australian dollar reached a new six year low of 72c to the US dollar.

In New Zealand, shares were at their lowest in four years, as the NZX50 fell by 2.5%, with every stock except telco Spark New Zealand falling. Tech darling Xero plunged to its lowest level in two years.

Elsewhere the woes spread to Europe where the FTSE plunged 2.8% at Monday’s open after China’s market suffered the biggest fall since 2007 on concerns of the country’s slowing growth.