Asian markets collapse as Shanghai tumbles 8.5%

<p>Investors are worried about a slowdown in the world’s second-largest economy.</p>

Asian stocks tumbled today (August 24th) after China's Shanghai composite Index fell 8.5 per cent to 3,209.91 over ongoing fears of a slowdown in the world's second-largest economy. The benchmark has now lost all of its gains for 2015.

Chinese shares fell 11 per cent last week after manufacturing activity fell to its lowest level since 2009.

"It is a key moment for China, with the equity market in free fall, the banking system increasingly starved of liquidity, rising capital outflows, and a rapidly slowing economy," IG's market analyst Angus Nicholson wrote in a note.

"The target is now looking overly ambitious and the most sensible way forward would seemingly involve further currency devaluation, further reserve requirement ratio cuts and fiscal stimulus," he added.

Japan's Nikkei 225 Index tumbled 4.61 per cent to 18,540.68, Hong Kong's Hang Seng Index was down 5.17 per cent to 21,251.57 and Australia's ASX 200 dipped four per cent to 5,001.28. South Korea's KOSPI Index was down 2.4 per cent to 1,829.81.

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