Asian stocks sank deeper into crisis on Monday and Shanghai fell the most in eight years as growing concerns that China's slowing economy will drag on world growth rattled equity investors.
Oil prices fell further after slipping below $40 a barrel for the first time since 2009, after weak Chinese manufacturing data deepened fears that the Asian giant is growing more slowly than thought.
China-linked shares led the falls, which spilled over into European and US equities, with Shanghai closing down 8.49 percent, or 297.83 points, to 3,209.91, the biggest daily loss since February 27, 2007.
Hong Kong's benchmark fell 5.17 per cent, or 1,158.05 points to finish the day at 21251.57 -- its lowest point since May 2014.
Tokyo fell 4.61 per cent, or 895.15 points, to a six-month low of 18,540.68. Seoul dropped 2.47 per cent or 46.26 points to 1,829.81 and Sydney lost 4.09 per cent, or 213.3 points, to finish at a two-year low of 5,001.3.
"Things are probably going to get worse before they get better," Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors Ltd. in Sydney, told Bloomberg News.
"You really need rate cuts and more policy easing in China. In the meantime, things can get worse."
Global equities have lost more than $5 trillion in value since China's shock currency devaluation on August 11 sparked fears its economy is slowing more than thought.
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