China's benchmark index suffered its worst day of trading in recent memory on Monday after regulators penalized three brokerages for breaking rules that limit risky margin trading.
The Shanghai Composite dropped nearly 8% as investors reacted to the ruling, which will prevent the brokers from opening new margin trading accounts for three months.
Shares of two affected brokerages -- Citic Securities and Haitong Securities -- quickly lost 10%, the daily limit for stocks trading in Shanghai. Guotai Junan Securities, the third broker, was trading down more than 10% in Hong Kong.
