BEIJING—China’s stock market fell Monday by its biggest margin in eight years, defying the government’s multibillion-dollar attempt to stop a slide that has wiped out all of the gains of this year’s price boom.

The decline threatened to weigh anew on global markets after last week’s Chinese losses triggered a worldwide selloff.

The European rout worsened, with equities tumbling for a fourth day and Germany’s benchmark gauge heading for a bear market.

All but four shares in the Stoxx Europe 600 Index fell as the gauge deepened its plunge after its worst week in four years. It slid 3.4 per cent at 12:05 p.m. in London, with miners leading the plunge in industry groups as commodities were set for their lowest levels since 1999. Germany’s DAX Index sank 3.1 per cent, down 21 per cent from its peak.

The rout that began with the devaluation of China’s currency has sent the Stoxx 600 into a correction, closing 13 per cent lower than the record it reached in April. Thirteen out of 18 western-European markets have fallen 10 per cent or more from their high, and the volume of Stoxx 600 shares changing hands almost double the 30-day average on Monday.

“Today everyone seems to be selling off, and there’s panic, there’s no rational choice anymore, no rational reaction,” according to Michael Woischneck of Lampe Asset Management GmbH. “There wont be a rebound today. The Americans will add to the European selling pressure in the afternoon, and that may drive us even lower.”

The DAX, one of the biggest gainers at the start of the year, will be among the most hit due its exposure to China, Woischneck said. If it closes at the current level, it will be the first to enter a bear market among western-European gauges.

All of the region’s national stock measures fell more than 2.5 per cent. The U.K.’s FTSE 100 Index is heading for its lowest level since 2012 and briefly dropped below 6,000. Glencore Plc and BHP Billiton Ltd. tumbled more than 6 per cent.

“We’re definitely getting a lot of calls from clients,” Michele Santangelo, a money manager at Vunani Private Clients, said by phone from Johannesburg. “You’re seeing a lot of capitulation, people selling for the sake of selling and wanting to get out of the market.”

Abengoa SA was among the only Stoxx 600 companies rising. A report said one of its shareholders repaid a loan and the shares used as collateral were freed. Modern Times Group AB gained 2.6 per cent after the Swedish media firm said it will cut jobs.

More than $5 trillion have already been wiped out from the value of global stocks since China unexpectedly devalued the yuan, raising concern over a global economic slowdown. The panic intensified at the end of last week, when U.S. equities, which had remained relatively stable, tumbled as investors dumped the biggest winners of 2015.

The benchmark Shanghai Composite Index fell 8.5 per cent to close at 3,209.91 points, its biggest one-day loss since an 8.8 per cent decline on Feb. 27, 2007. The index is down 38 per cent from its June 12 peak and just under 1 per cent below its closing on Dec. 31, last year’s final trading day.

The slump has inflicted heavy losses on small investors, souring many on stock ownership and threatening to disrupt Communist Party plans to use the market to raise money for reforms of state industry.

“It feels like the end of the world,” said Pan Chong, a social media specialist. He said he invested 50,000 yuan ($10,350) in April, made 40 per cent and then saw the market wipe out those gains.

“The so-called correction will finally become a long-term bear market,” said Pan, 25. “So I’m considering selling all my shares as soon as possible.”

The Chinese benchmark soared more than 150 per cent starting in late 2014 after state media said shares were inexpensive, which led investors to believe Beijing would shore up prices if needed. Urged on by state media, millions of novice investors rushed into the market.

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Prices faltered and then plunged after an unrelated change in banking regulations in June led investors to question whether Beijing’s support might be weakening. The market index fell 30 per cent, prompting Beijing to intervene by barring big shareholders from selling and promising state-owned brokerages and pension funds would buy.

Beijing’s initiatives helped to calm markets. But after the state-owned company charged with buying shares to prop up prices announced it would not intervene every day, the Shanghai index fell 11.5 per cent last week.

China’s plunge plus weaker oil prices drove triple digit losses on the Toronto Stock Exchange Friday.

The declines come at a time when exports, manufacturing and other Chinese industries are weakening, leaving little economic foundation for higher share prices.

The latest fall probably was triggered by poor performance at publicly traded companies, said Guo Tianyong, a professor at the Central University of Finance and Economics in Beijing.

The government reported last week that profits at state-owned companies contracted by 2.3 per cent in July from a year ago, compared with a 0.1 per cent contraction through June.

“We shouldn’t doubt the government’s ability to rescue the market. If they want, they could push up the stock index to 5,000, but it is not necessary for the government to play an excessive role,” said Guo. “It still would be better for the market itself to play its role.”

Beijing’s surprise Aug. 11 devaluation of its yuan added to investor jitters. They worry the change will lead to money flowing out of China, reducing credit available for trading. The central bank has responded by pumping extra money into credit markets.

The ruling party wants to use the markets to raise money for state companies to reduce debt loads and modernize. The party also wants to encourage stock ownership as a way for families to save for retirement, reducing demand for social spending. But small investors whose holdings have plunged in value say they will no longer buy shares.

Lu Zhen, 29, an employee at a financial firm, said the value of his shares rose by 250,000 yuan ($40,000) over the first half of the year. But he said since the June downturn, he has lost that and an additional 150,000 yuan ($24,000).

“This is definitely the end of a bull market,” Lu said.

Includes files from Bloomberg

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