LONDON (TheDeal) -- European stock markets opened sharply lower Monday, Aug. 24, setting up a fourth consecutive day of losses after Asian markets collapsed overnight, led by a huge selloff in Chinese shares.

Europe's main stock markets opened down about 3% before recouping some of those losses in early morning trading. In London, the FTSE 100 was down 2.31% at 6,044.96, Frankfurt's DAX was 2.2% lower at 9,902, while Paris's CAC 40 index fell 2.14% to 4,532.

China's Shanghai Composite Index tumbled more than 8.5% on Monday, posting its biggest one-day loss in percentage terms since the 2007 global financial crisis and wiping out what was left of this year's gains. Shares in about 80% of China's listed companies were suspended after falling the maximum 10% daily limit, prompting Xinhua, China's official state news agency, to dub the day's trading "Black Monday."

China's already skittish and bruised investors dumped stock after the government declined, over the weekend, to announce significant policy support for the market following last week's 11% decline. Investors had been hoping for a cut in bank reserve ratios that would have eased pressure on bank lending and were left unimpressed by Beijing's alternative of freeing state pension funds to invest as much as 30% of their net assets in stocks.

"The People's Bank of China remains in 'see what sticks' mode, and so far nothing has been able to provide an adequate tourniquet for the market-wide bloodshed that has only intensified this Monday," noted Connor Campbell, an analyst at London-based Spreadex.

The Chinese mainland's stock market malaise spread across the Asia Pacific on Monday. Hong Kong's Hang Seng Index closed down 5.2% at 21,251.27, its lowest level since March of last year. Japan's Nikkei 225 was down 4.61%, posting its biggest fall in more than two years, to fall to 18,540.68. Australia's ASX 200 tallied up its biggest one-day selloff in over six years, falling 4.09% to 5,001.3.

In Europe, it proved impossible for any company to rise above the selling, with not a single member of the FTSE 100, the DAX or the CAC 40 in positive territory on Monday morning.

Mining stocks led London markets lower as commodity prices tumbled on fears that China's economic slowdown would prove deeper than previously thought. BHP Billiton (BHP) was the FTSE's worst performer, down 5.63%, trailed by Anglo American (AAUKY), down 4.75%, and Rio Tinto (RIO), down 4%.

Losses on Germany's DAX were headlined by a 4.3% fall at energy utility RWE (RWEOY) and a 3% fall in Heidelberg Cement (HDELY). ArcelorMittal (MT - Get Report) led the fallers in the French market, down 5.17% on fears of slowing demand for its steel products.

Oil prices tumbled alongside the markets, with both West Texas Intermediate and Brent Crude benchmarks falling to six-and-a-half year lows on fears of slowing Chinese demand. Brent traded Monday at $44.05, down 3% to its lowest levels since March 2009, while WTI was also down about 3% to $39.20, a price last seen in February 2009.

The collective collapse of stock markets and commodity prices has turned attention back to the Federal Reserve and the possibility of a U.S. rate hike in September. That hike looks increasingly unlikely, according to analysts who noted renewed demand for 10-year bonds as investors seek safe havens.

"We always thought something would get in the way of the Fed raising rates in September and we're perhaps seeing this now," wrote Deutsche Bank's Jim Reid.