Japan`s Nikkei has closed 4.6 percent down. Hong Kong`s Hang Seng is 5.21 percent in deficit. Mumbai`s Sensex is down over 4 percent in late trading.
The ripple effects are being felt on the European markets.
London`s FTSE is down 2.5 percent in early trading. Germany’s DAX is losing over three percent, sliding below the 10,000-point mark for the first time since January.
The European stock markets have continued last week’s negative trend, when 13 out of 18 western European markets lost 10 percent or more, with Germany’s DAX Index down 18 percent. London`s FTSE 100 index suffered its biggest weekly drop in 2015, slumping 5.2 percent.
Commodities are down across the board with Brent oil trading at $44.07 as of 0617 GMT, which is a six-and-a-half-year low.
The Russian ruble has hit new lows against major currencies, dragged down by both weak oil and Chinese stocks. The Russian currency is now trading at over 71 rubles against the dollar and 81.40 rubles against the euro as of 07:44 GMT.
Over the last month, the Chinese government has taken drastic measures to arrest the stock market`s decline. On Sunday, the Xinhua news agency reported that Beijing would allow its main state pension fund to invest up to 30 percent of its net assets in China-listed shares in the stock market for the first time.
In mid-August, the People’s Bank of China devalued the yuan over three consecutive days, stopping at 4.4-percent overall depreciation. The move intended to help faltering exports sowed panic in the world’s equity markets and may have started a new wave of currency wars.
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