Shanghai Composite drops to four-year low

• Global cues and growth concerns weigh over Chinese stocks.
• PBOC's surprise rate cut fails to calm market nerves.
• The Shanghai Composite index fell to its lowest level since December 2014.

The Chinese stocks gapped lower and fell to four-year lows, tracking the sharp losses in the US stocks.

At press time, the Shanghai Composite index is trading at 2,624 - having hit a low of 2,618.58 - the lowest level since December 2014 earlier today.

The People's Bank of China (PBOC) announced a 100 basis point cut in the reserve requirement ratio (RRR) last weekend, but the move likely revealed to the markets that the central bank is worried about the prospects of a deeper economic slowdown in the coming quarters.

This is evident from the drop in the Chinese equities and global equities in general. Further, the 800 point drop witnessed in the US stocks yesterday is also being blamed on rising Treasury yields.