Investing.com - China stock markets fell sharply on Tuesday, with the Shanghai Composite plunging more than 6% after yet another late bout of panic selling triggered by intensifying global growth concerns and ongoing weakness in oil prices.
The Shanghai Composite Index finished down 6.42% at a 13-month low of 2,749.51, as losses accelerated in the last hour of trading, while the CSI 300, a benchmark of blue chips in Shanghai and Shenzhen, fell 6% to 2,940.51. By midday, both indexes had been down around 2%. It was the biggest one-day decline since a 7% drop on January 7.
News that the People’s Bank of China conducted its biggest daily open markets operation in three years failed to lift sentiment, as the central bank injected 360 billion yuan into money markets ahead of the country's Lunar New Year holiday, which starts on February 7.
Investors also remain wary over increasing capital outflows and further weakness in the yuan (USD/CNY).
The rest of Asia closed deep in the red, as oil prices sank back below $30 a barrel. Japan’s Nikkei 225 slumped 2.35%, while markets in Hong Kong and South Korea lost 2.4% and 1.15% respectively.
Oil prices fell sharply as investors shifted their focus back to concerns over a global supply glut and slowing global demand. The drop in oil prices, which are down more than 70% from their 2014 high, has fueled mounting risk aversion, sending global equities sharply lower since the start of the year.
Investors looked ahead to this week’s Federal Reserve policy statement due on Wednesday for any indication that the bank is considering slowing the path of interest rate increases this year.