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SHANGHAI — Chinese stocks tumbled again on Tuesday, despite a rebound in markets elsewhere in Asia.
Major Chinese stock indexes nosedived more than 7 percent, hitting their lowest levels since December, following their more than 8 percent plunge on Monday that sent shockwaves through global financial markets.
Japan's Nikkei slumped 4 percent on Tuesday, but the rest of Asia was been calmer overall. Europe also started on a firmer footing after Monday's global beating had wiped around $520.70 billion off the value of its leading stock markets.
"I think it's important that people don't hyperventilate about these type of things"
The pan-European FTSEurofirst 300 index clawed back 1.7 percent of the more than 5 percent it had lost as London, Paris and Frankfurt bounced 1.5-1.7 percent.
China, one of the main engines of the world economy, has overtaken Greece at the top of the worry list of global investors, who fret its economy is growing at a much slower pace than the official 7 percent target for 2015.
But unlike in July, when Beijing directed hundreds of billions of dollars into the market in an unprecedented rescue operation, policymakers have largely sat on their hands during the latest bout of turbulence, which began last week.
"Calling it a market disaster is not an overstatement," said Zhou Lin, an analyst at Huatai Securities. "The mood of panic is dominating the market ... And I don't see any signs of meaningful government intervention."
The CSI300 index of the largest listed companies in Shanghai and Shenzhen dropped 7.1 percent, while the Shanghai Composite Index collapsed 7.6 percent to close below the psychologically significant 3,000-point level.
Underscoring the panic gripping the retail investors who dominate China's stock markets, all index futures contracts fell by the maximum 10 percent daily limit, pointing to expectations of even deeper losses.
After the turmoil in China rocked world equity and commodity markets on Monday, policymakers elsewhere in Asia sought to soothe fears about the broader impact on the global economy.
"I think it's important that people don't hyperventilate about these type of things," said Australian Prime Minister Tony Abbott, whose country is heavily exposed to China, the biggest consumer of its commodity exports. "It is not unusual to see stock market corrections. It is not unusual to see bubbles burst in particular markets and for there to be some flow-on effect in other stock markets, but the fundamentals are sound."
Japanese Finance Minister Taro Aso also said Chinese stocks, which had more than doubled in the six months to May, had been a bubble that was now bursting.
"There's also suspicion on whether China's official GDP figures reflect the real state of the economy," he told a news conference after a cabinet meeting in Tokyo.
After a year of heady gains, Chinese markets have been buffeted by increasing signs that economic growth is faltering.