China’s benchmark CSI300 share index tumbled 7 per cent on the first session of 2016 on Monday, prompting the stock exchange to halt trading for the rest of the day.
The "circuit breaker" suspension mechanism first came into effect on Monday.
Stocks slumped after weak factory activity surveys soured hopes that the world's second-largest economy will enter the new year on better footing, and selling intensified throughout the day.
Investors also dumped stocks ahead of the imminent expiration of a share sales ban on listed companies' major shareholders, which had been imposed during the market crash last summer.
Earlier, China's CSI300 stock index fell 5 per cent on the first trading day of 2016, triggering a circuit breaker mechanism that would briefly halt trade.
A 5 per cent rise or fall in the CSI300 index triggers a 15-minute suspension of all the country's equity indexes and equity index futures. Moves of 7 per cent from the previous close would trigger a trading suspension for the rest of the day.
That mechanism first came into effect on Monday.