Chinese stocks plunged Monday, spurring a trading halt for the rest of the session, and leading stock markets in Asia Pacific lower after feeble manufacturing surveys revived concerns over the mainland's economic slowdown.
The Shanghai Composite tumbled 6.85 percent to 3296.66 and the Shenzhen Composite plunged 8.1 percent.
The CSI 300 briefly plummeted 7.02 percent; when that index rises or falls 7 percent, a trading halt in China's markets is triggered for the rest of the session.
Hong Kong's Hang Seng index was also down 2.48 percent at 21,370.62. Stocks in Australia, Japan, South Korea and India also fell. Energy plays, however, saw some gains after oil prices bounced during Asian trading hours.
Gavin Parry, managing director at Parry International Trading, said several factors could explain the sell-off in the Chinese markets. First, he noted the manufacturing report that was out over the weekend, followed by the lower-than-expected Caixin survey released earlier in the morning.
Parry said everyone is "still focusing on the industrial side of things."
China's official manufacturing Purchasing Managers' Index (PMI), a measure of factory activity, stood at 49.7 in December, in line with market expectations. On the other hand, the official non-manufacturing PMI was up 54.4, from November's reading of 53.6. A reading below 50 indicates a contraction in activity on a monthly basis.
The Caixin December manufacturing PMI was down at 48.2, compared with 48.6 in November. The Caixin PMI is a closely-watched gauge of nationwide manufacturing activity, which focuses on smaller and medium-sized companies, filling a niche that isn't covered by the official data.
The geopolitical situation in the Middle East is also a point of concern for market watchers. Parry said China has sizable investment in Iran's oil industry. The escalation of tension between Iran and Saudi Arabia will likely weigh on expectations.