Another sharp devaluation of the Yuan encouraged further pessimism among investors on Thursday, sending stocks deep into the red and causing a trading halt in China. The People's Bank of China (PBoC) set the Yuan reference rate at 6.5646 on Thursday, marking the third sizeable devaluation by the central bank this week.
Hong Kong's benchmark Hang Seng index tumbled 2.59% to 20,438.08 points about an hour after trading began in China on Thursday, while mainland China's benchmark Shanghai Composite plummeted 7.32% to 3,115.89 points before officials put a halt on trading.
The benchmark Australian S&P/ASX 200 index was trading 1.14% lower at 5,064.80 points after midday in Sydney.
New Zealand's benchmark S&P/NZX 50 index fell 0.44% to 6,235.21 points this afternoon in Wellington.
The World Bank cut its global growth outlook for 2016 on Wednesday as activity in emerging economies, particularly China, continues to slow. The global economy is forecast to grow some 2.9% in 2016, lower than the World Bank's earlier forecast of 3.3%, but up from 2.4% growth in 2015.
2016 has started out on a similar note, with signs of weakness in China already causing huge swings in financial markets, and oil prices hitting new multi-year lows.
Global growth in 2015 was lower than expected due to falling commodity prices, flagging trade and capital flows, and episodes of financial volatility.
According to World Bank, Emerging economies are expected to grow some 4.8% this year, up from a post-crisis low 4.3% in 2015.
