Chinese markets extended an already rough start to the year Monday, losing further ground after another sell-off in late afternoon trade that sent mainland indexes down more than 5 percent. The Shanghai composite tumbled points, or 5. In afternoon trade, Hong Kong's Hang Seng index closed down 2. The rest of Asia also closed down, with Australia's main ASX index continued its downward slide, ending The energy, materials and financials sectors weighed, with those indexes down 1.

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In South Korea, the Kospi shed Mainland brokerages suffered steep losses, with shares down as much as 9 percent at market close. Citic Securities ' mainland-listed shares were off 7. Airlines stocks on the mainland traded mixed, between up 3. Airlines tend to see an earnings boost when oil prices fall. On Monday the People's Bank of China PBOC guided the yuan higher by setting the mid-point fix at 6. On Friday, the midpoint was fixed at 6. The yuan traded at 6. The yuan-based Hong Kong Interbank Offered Rates Hibor spiked to over 13 percent from 4 percent Friday as offshore yuan volume declined.

Last week, the Shanghai Composite lost all of its gains, falling by 9. Trading in Chinese markets was halted twice last week by circuit breakers - a market-calming regulatory tool - that were only implemented in the country at the start of the week.

The circuit breakers were designed to trigger a minute trading halt if the CSI index fell 5 percent. If that index moved by 7 percent, trade was halted for the rest of the session.

By the end of the week, China suspended its circuit breakers, but investors remained wary over the country's ability to handle financial turmoil. Experts said the ongoing crisis in Asia's largest economy would have bigger, broader implications about the region's economic prospects. Taimur Baig, chief economist for Asia at Deutsche Bank Research, said in a note on Friday, "The key risk is China, where fears of continued economic slide are causing capital outflows, exchange rate depreciation, asset market selloff, and policy dilemmas.

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Baig noted that while this might not halt economic growth in the mainland, with large parts of the economy operating independently of the country's stock markets, it would hurt sentiment -- not just in China, but also in rest of Asia, causing possible deflation, credit crunches and policy challenges.

The Australian dollar fell below 70 U. Paul Bloxham, chief china stock market dropped for Australia and New Zealand at HSBC, said in a note that this was the third time since the global financial crisis that the Aussie had fallen below 70 U. But a weaker Aussie was not necessarily negative for Australia's economy, Bloxham said, because it could help to offset the lower commodity options trading strategy and mentoring program that were hitting local income growth and speed up the economy's rebalancing toward non-mining sectors.

Energy plays in Asia traded in the red, weighed by further declines in oil prices. Globally traded Brent futures were down 2.

Australian oil stocks SantosOil Barclays stockbrokers share tips and Woodside Petroleum closed down between 0.

In China, mainland oil stocks were down between 2.

Rio Tinto and BHP BillitonAustralia's two biggest miners, shed 3. Elsewhere, in South Korea, shares of heavyweight Samsung Electronics were down 1. Other blue chip stocks such as SK Hynix also traded lower. Shares of Doosan were down 0.

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Register Log In Profile Email Preferences PRO Sign Out. World Heat Map US Americas Asia EU. China shares tumble in late trade as Asia markets sell off Saheli Roy Choudhury sahelirc. China's markets 'spooked' by economic policy: Why China will stay weaker longer: Bearish market for Asia. Beijing guides the yuan higher On Monday the People's Bank of China PBOC guided the yuan higher by setting the mid-point fix at 6.

Aussie drop a double-edged sword Symbol. Commodities remain a concern Energy plays in Asia traded in the red, weighed by further declines in oil prices. Resource stocks were also down, pressured by lower commodity prices. Samsung drops on missed targets Elsewhere, in South Korea, shares of heavyweight Samsung Electronics were down 1.

Shares of Korean Aerospace Industries closed down 4. On Wall Street last week In the U.

In Japan, the market will be closed for a public holiday. Saheli Roy Choudhury Reporter, CNBC. To view this site, you need to have JavaScript enabled in your browser, and either the Flash Plugin or an HTML5-Video enabled browser. Download the latest Flash player and try again. YOUR BROWSER IS NOT SUPPORTED. Please upgrade to watch video. The requested video is unable to play. The video does not exist in the system. Please disable your ad blocker on CNBC and reload the page to start the video.