Mainland equities sold off sharply in the final hour of trade on Tuesday, leading the losses in Asia, amid a renewed selloff in oil and caution ahead of the Federal Reserve’s monetary policy decision.
China’s Shanghai Composite closed down 6.4 percent, hitting its lowest level since December 2014. The late burst of selling came after the index traded down 2 percent for most of the session, giving up all of Monday’s gains. Year-to-date, the index is already 22 percent lower.
News that the People’s Bank of China conducted its biggest daily open markets operation in three years failed to lift sentiment. The central bank injected 360 billion yuan into money markets on Tuesday in an attempt to boost liquidity ahead of the Lunar New Year holiday.
Oil majors such as PetroChina and Sinopec tumbled 5 percent each as U.S. crude fell below $30 a barrel on Tuesday.
Oversupply fears were to blame for oil’s rout after Iraqi officials told Reuters on Monday that the country had record output in December, with certain fields producing as much as 4.13 million barrels a day.