China's stock market continued its poor start Tuesday, with its benchmark index falling more than 6 percent to a 14-month low after oil prices sank, as evidence of the Chinese economy's troubles mount and investors worry about slower global growth.
The drop comes after a sell-off in the United States on Monday that caused oil prices to fall below $30 a barrel, reported Reuters. However, it also comes at a time of continued market volatility in China stemming from growth concerns and confusion over the central bank's foreign exchange policy.
Oil prices, seen as an indicator of global economic health, has been a constant concern for investors as it continue to worry about a slowing China and plans by the U.S. Federal Reserve to raise interest rates.
"The volatility [in oil] is not helping restore confidence back in the market," said Robert Levine, head of Asian sales and trading at brokerage CLSA, according to MarketWatch. "It's not easy to put on new bets."
As with the Shanghai Composite Index, China's main benchmark, other shares in China fell as well. For example, China's ChiNext benchmark fell 7.8 percent, while the Shenzen Composite Index closed down 7.1 percent.
Asian markets across the board have been feeling the pain as well, with Hong Kong's energy sector falling 5.8 percent, pulling the Hang Seng Index down by 2.4 percent along with it. Similarly, Japan's Nikki Stock Average dropped 2.4 percent while South Korea's Kospi dropped 1.2 percent.
Europe fared better, if only marginally, with Germany's DAX falling 0.5 percent, France's CAC 40 falling 0.4 percent and Britain's FTSE 100 down 0.7 percent, according to USA Today.
Michael Every, who heads Financial Markets Research, Asia-Pacific, at Rabobank, argued that these series of slumps aren't anything unusual and more should be expected to come so long as the market is overpriced.
"It's just another in a long series of slumps that we have seen in this market, and it's not the last we will see either because the market is still overpriced. And too many people want to get their money out. It's been a bubble since it began last summer," he said.
