Get set for more volatility: Asian shares plummet again, with the Shangai Composite falling more than six per cent and the Shenzhen Composite falling seven per cent

 
Emma Haslett
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Chinese Stock Declines Sharply On Friday
Stocks declined sharply in the afternoon (Source: Getty)

Stocks in China plummeted overnight, as tumbling oil prices pushed them to a 14-month low.

The Shanghai Composite index fell 6.4 per cent to end at 2,749 points - its lowest close since December 2014. Meanwhile, the Shenzhen Composite fell 7.1 per cent to 1,714 points, its lowest since March last year.

The Nikkei fell 2.3 per cent to 16,708 points, while Hong Kong's Hang Seng index fell 2.7 per cent, to close at 18,815 points.

The news came after oil fell back below $30 a barrel yesterday, having rallied more than 10 per cent on Friday. That combined with worries over capital outflows to send investors into a selling frenzy in the afternoon.

"Oil breaking back below the now key $30 a barrel ahead of US stockpile data... rekindled global growth concerns as major producers refuse to cut output," said Michael van Dulken, head of research at Accendo Markets.

"After the recent rally, anxiety [is] on the rise regarding the outcome of Federal Reserve and Bank of Japan meetings this week, with much debate about whether the former hiked too early.

"Stocks in China [also] plunged... on capital outflow concerns from its transitioning economy and despite the People's Bank of China flooding the system with cash to keep borrowing costs in check ahead of the Lunar Holiday."

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