Chinese shares down on fears of further market volatility

Chinese shares have slipped again ahead of economic data expected to point to a further slowdown in the world's second-largest economy.

The benchmark Shanghai Composite closed 0.8% lower, at 3,205.99, having dipped by almost 3% in early trade.

Chinese shares have tumbled dramatically in the past two weeks, sparking turmoil in stock markets around the world.

Monday's slide has dashed hopes that Chinese markets have turned the corner.

Investor sentiment was also hampered by media reports that Chinese authorities had decided to intervene less in the stock market.

Recent volatility has been marked by various efforts by Beijing to stabilise markets and calm traders.

China has also cracked down on people accused of spreading online "rumours", and who the authorities say have been "destabilising the market".

According to state news agency Xinhua, a journalist and stock market officials are among those arrested.

Tuesday will see the release of an important monthly index gauging the country's factory output.

The purchasing managers' index (PMI) will give another pointer as to whether the world's second largest economy is still slowing down.

Hong Kong's Hang Seng was in negative territory for most of the day, but edged up 0.3% at the end of trading, finishing at 21,670.58 points.

Elsewhere in Asia, Japan's benchmark Nikkei 225 closed 1.3% down at 18,890.48.

Traders in Tokyo were also taking in some weaker-than-expected economic data on the Japanese economy.

The country's factory output was down by 0.6% in July compared with the previous month.

Japan's exports have been suffering from falling demand in neighbouring China.

South Korea also had fresh economic data to digest, struggling with the same problem as Japan.

Industrial output fell as exports in the region's fourth largest economy continued to lag because of sluggish global demand.

The country's benchmark Kospi index finished flat at 1,941.49 points.

Polls show business sentiment is pessimistic about the outlook for September, with no expectations for a quick recovery for the crucial export sector.

Australia's S&P/ASX 200 followed the region's trend and closed 1.1% lower at 5,207.00 points.