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China Stocks Plunge Triggering Panic Selling Across Asia

Jim Cramer: Wall Street ‘imported problems from overseas’ 3:12

TOKYO — Stocks tumbled Monday as China's main index sank 8.5 percent in tumultuous trading spurred by deepening fears over the slowdown in the world's second-largest economy.

The Shanghai composite index slid to 3,209.91 as many China-listed companies hit their 10 percent downside limits. The benchmark has lost all of its gains for 2015, though it is still more than 40 percent above its level a year ago.

China's dimming outlook is provoking calls for more economic stimulus from Beijing, though earlier government efforts to staunch the hemorrhage appear to have done little to stabilize markets.

Asia's gloom spread to European markets, which opened Monday with Britain's FTSE 100 down 2.3 percent at 4,509.56 and Germany's DAX falling 2.5 percent to 9,871.96. The CAC 40 of France fell 2.2 percent to 4,528.96.

The bloodletting spread across Asia, as Hong Kong's Hang Seng index fell 5.2 percent to 21,251.57 and Japan's Nikkei 225 index dropped 4.6 percent to 18,540.68. Australia's S&P ASX/200 slid 4.1 percent to 5,001.30, while South Korea's Kospi lost 2.5 percent to 1,829.81.

Those declines followed tumbles over the weekend in emerging markets such as Egypt, Dubai and Saudi Arabia.

Fresh evidence of the slowdown in China's economy sparked a wave of selling Friday in Europe and the U.S. that culminated with the S&P 500 losing nearly 6 percent for the week in its worst weekly slump since 2011.

The panic has underscored the scale of the challenge for Chinese leaders in seeking to curb excess investment and guide the economy toward a more sustainable pace of growth.

FROM AUG. 21: NBC News Special Report — Stock Market Plunge 2:29