China’s stock market fell out of bed overnight, falling by its biggest margin in eight years. A wave of risk-off selling hammered the market. 993 stocks listed on the benchmark index, accounting for over 90 percent of listed companies, either halted trading voluntarily or were halted by the daily 10 per cent limit rule.

The Shanghai Composite Index closed down 298.81 points at 3,208.93 points, down 8.52 percent.

The drop mirrored that of the Shenzhen Composite Index, which closed down 8.85 percent to 3,271.89.

The latest selling came as the result of fears about the sagging Chinese economy.

“The official PMI to be released next Tuesday (on September 1) will be closely watched by the market,” said ANZ Bank in a note to clients. “Activities remain sluggish while the risk of deflation has not abated with PPI falling for 41 consecutive months. We expect a RRR cut in Q3 followed by an interest rate cut.”

Investors fear that China is in for a hard economic landing after a slew of policy incentives failed to improve economic performance.

There has also been deep distrust among investors for Chinese economic data, which recorded just over seven percent GDP growth last month. Many American investors do not believe China is growing anywhere near this level.

China’s Shanghai index has erased all its gains for the year and is now in negative territory in 2015.

U.S. equities look set to follow suit, with all major index futures solidly in the red.

U.S. markets experienced large losses on Friday after a similar result in China, with the benchmark Dow Jones Industrial Average losing over 500 points.

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