Asian stocks closed sharply in the red, led by a heavy afternoon sell off in the Chinese market as brokerages tumbled after authorities launched probes for alleged violations of trading rules.
Elsewhere, the ASX, Nikkei, and Kospi all closed in the red.
China market tanks as CSRC goes after brokerages
In China, equities saw a significant sell off as a result of investigations by the Chinese securities regulatory body into several brokerages for breaking regulations. The Shanghai Composite closed 199 points, or 5.48 percent, lower; the Shenzhen Composite closed 6.1 percent lower, the Chinext was down 6.1 percent, and the CSI300 Index saw a decline of 5.38 percent.
Chinese brokerages took major hits, with Citic Securities, Founder Securities, and China Merchants closing 10.1, 10, and 9.98 percent lower after news broke that the China Securities Regulatory Commission (CSRC) has launched investigations into these firms to weed out short selling and speculation.
Earlier in the day, Citic announced it received a formal notice from the China Securities Regulatory Commission (CSRC) that it was under investigation, along with Guosen Securities, for violating securities laws. Shares of Guosen also plunged, closing 10 percent lower in afternoon trading.
Reuters then reported that Haitong Securities, whose shares were halted from trading, was also being investigated by CSRC for alleged violation of securities regulations. Earlier in the year, the firm was fined 86 million yuan ($13.5 million) for breaching securities rules.