Shares in China nosedived in Monday morning trade, as poor manufacturing data, raised fresh concerns of growth in Asia's largest economy.

The Shanghai Composite tumbled 7 per cent at 3296 points. Asian markets followed China lower with stocks in India, Singapore, South Korea and Japan also falling sharply.

The fall in stock prices was after a release of the Caixin December manufacturing PMI, which dropped to 48.2 compared to the 48.6 in November.

The index is closely-watched gauge of nationwide manufacturing activity, which focuses on smaller and medium-sized companies.

For months analysts have been warning of a slowdown in China and worst fears now seem to be coming true. A further slowdown could lead to a sharp drop in commodity prices, which could worry analysts even further.

There were worries late last year that China, often considered as the world's growth engine was slowing. Authorities in China may now use temporary measures as a short selling curb to prevent any further downside in the markets, when they open for trading again on Tuesday.

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