The Shanghai Composite Index has fallen to its lowest level in nearly three months, on what was the first trading day of 2016.

An earlier 15-minute break in trading, when shares had fallen by more than 5%, failed to stem the slump.

This is the first time that a new "circuit breaker" system - designed to curb volatility in Chinese stock markets - has been triggered - trading ended 90 minutes earlier than the usual close.

Some $89.9bn worth of shares changed hands before trading was stopped.

Bloomberg

Poor Chinese manufacturing data is believed to be one of the factors behind the fall.

An independent report released early on Monday suggested that factory activity in China has been contracting for 10 consecutive months as of December.

Escalating tensions in the Middle East, sparked by Saudi Arabia's execution of a prominent Shia cleric over the weekend, also led to a jump in oil prices.

Financial analysts are also concerned about how the market will react when measures designed to enhance stock market stability expire in the coming days.

At the start of July, major shareholders in Chinese companies were banned from selling their stakes for six months - but this policy is about to expire.

Japan's Nikkei 225, along with the Hang Seng in Hong Kong, have also tumbled by about 3% each.