European stocks were in a sea of red on Monday, as a sharp selloff in China scared investors out of equities.

The Stoxx Europe 600 index slumped 2.5% to close at 356.66 in the first session of the new year, after gaining 6.8% in 2015. All major sectors were in the red, led by basic materials, consumer goods and financial plays.

Equity strategists have generally been optimistic about the outlook for European stock markets in 2016, but the action on the first trading day of 2016 was exactly the opposite. All regional benchmarks were trading sharply lower, most notably Germany’s DAX, in the wake of the plunge in Chinese shares that was fueled in part by disappointing Chinese manufacturing data. Stocks in China at one point dropped almost 7%, triggering a circuit breaker that halted trading on the mainland for the rest of the day.

Source: MarketWatch