China stocks in freefall

Shanghai stocks dropped 6.15 percent on Tuesday, with the benchmark Composite Index losing 245 points and marking the hardest fall in three weeks.

The one-day decrease in the stocks' value was the biggest since July 27 when the index plunged by 8.48 percent, leaving analysts puzzled about the state of the world's second-largest economy.

"The market lacks the momentum to go up; there's no major positive news," said Shen Zhengyang, an analyst at Northeast Securities.

Get out while you can?

Slowing growth rates and an unexpected currency devaluation last week had weighed on market sentiment, despite a pledge by Chinese regulators they would continue to stabilize stock prices for a number of years.

European markets on Tuesday were also seen buckling under heavy selling pressure carried over from Asia.

"Traders' suspicion is that the second largest economy in the world is heading for a hard landing," IG market commentator David Madden said in a statement.

"The more the Chinese government intervenes, the more traders want to dump stock and head for the exit."

hg/sri (AFP, Reuters, dpa)