Chinese stocks tumble another 7.6 per cent

The Shanghai Composite Index closed down 244.94 points to 2,964.97 amid sharp declines that have rattled investors abroad and triggered a global stock sell-off. Photo / AFP

China's main stock market index has fallen for a fourth day, plunging 7.6 percent to an eight-month low.

In Japan, the Nikkei 225 index, which had risen earlier today, closed down 3.9 percent at 17,806.70.

The Shanghai Composite Index closed down 244.94 points to 2,964.97 amid sharp declines that have rattled investors abroad and triggered a global stock sell-off.

It tumbled 8.5 percent Monday.

Chinese stocks have plunged over the last two weeks despite a multibillion-dollar government effort to stop a slide in prices.

In New Zealand shares bounced back after about $2 billion was wiped off the value of the market on Monday.

The S&P/NZX 50 Index rose 5.98 points, or 0.1 percent, to 5613.29, somewhat reversing yesterday's biggest drop in four years. Within the index, 15 stocks rose, 28 fell and seven were unchanged. Turnover was $260 million.

Across the Tasman the Australian share market has posted its strongest gains in almost four years in a remarkable turnaround from Monday's $64 billion plunge.

The market rose more than 2.5 per cent, its strongest session since October 2011, even after falling 1.5 per cent in early trade.

Signs of a positive move on Wall Street when it next trades lifted sentiment and pulled the market out of the red, optionsXpress market analyst Ben Le Brun said.

"The futures market started to turn positive, which is what we base our optimism around," he said.

"There's been a very strong bounce back from the banks and that has really lifted the market."

Judging from the rebound in the US futures market, investors believe Wall Street was oversold on Monday, he said, despite a global equities rout linked to mounting worries about the Chinese economic slowdown and its impact on global growth.

The volume traded on the Australian market on Tuesday was double that of usual levels.