Chinese shares drop in dramatic slide

Chinese shares continued their sharp fall on Monday as concerns over the country's slowing growth and volatile markets sparked panic among traders.

The mainland benchmark index, the Shanghai Composite, fell sharply by 8.4% to 3,211.75 points, extending last week's losses.

The sell-off continued despite China's latest attempts to reassure investors.

Over the weekend, Beijing said it planned to let its main state pension fund invest in the stock market.

Under the new rules, the fund will be allowed to invest up to 30% of its net assets in domestically-listed shares.

The fund will be allowed to invest not just in shares but in a range of market instruments, including derivatives. By increasing demand for them, the government hopes prices will rise.

The Hong Kong Hang Seng index followed the mainland's sharp decline, dropping 4% to 21,523.57 points in early trade.

Simon Littlewood, president at business advisory firm ACG Global told the BBC there were concerns that the world's second biggest economy was "a one-trick pony as they have been trying repeatedly over the past few months to put more liquidity into their economy", yet so far have failed to calm markets.

Over the past week, China's benchmark Shanghai Composite fell 12%, adding up to a 30% drop since the middle of June.

The sharp fall sparked a global sell-off, with the Dow Jones in the US losing 6%, while the UK's FTSE 100 posted its biggest weekly loss this year of 5%.

Earlier this month, the Chinese central bank devalued the yuan in an attempt to boost exports.

Elsewhere in Asia, the region's biggest stock market, Japan's Nikkei 225 traded 2.8% lower at 18,907.39 points in Monday morning trade.

It marks the Nikkei's lowest level in nearly five months.

In Australia, the S&P/ASX 200 was down by 2.9% to 5,063.50 points.

Iron ore miner Fortescue posted an 88% drop in annual net profit as the sector was hit by a global drop in commodity prices. Fortescue shares were down by more than 10% on the weak results.

In South Korea, the Kospi index followed the region's lead, trading 1.4% lower at 1,850.56 points.

Earlier on Monday, stock markets in the Middle East also fell sharply.