Japan’s Nikkei 225 index dropped 3.1 percent and Hong Kong#8217;s Hang Seng index fell 2.6 percent.

170-r-13-(Sound of the opening bell at the New York Stock exchange, at the start of today’s trading)-Sound of the opening bell at the New York Stock exchange at the start of today’s trading.

A currency trader looks at the computer monitors at the foreign exchange dealing room in Seoul, South Korea, Monday, Jan. 4, 2016.

New data on Chinese factory activity sent a wave of financial concern across the Pacific Monday on the first day of stock trading in the new year, sending major USA indices sharply lower.

“This will be the theme for the year”, said Devendra Joshi, an HSBC Asia equity strategist. Although the new circuit breakers were tested to their limits on the very first day of trading in the New Year, traders and regulators said the halts took effect as anticipated without any major technical problems.

Under the circuit breaker rules finalized last month, a move of 5 percent in the CSI 300 triggers a 15-minute halt for stocks, options and index futures, while a move of 7 percent closes the market for the rest of the day.

The rise came as relations between leading crude producers, Saudi Arabia and Iran deteriorated, raising concern supplies would be disrupted. That sent the price of oil on another wild ride.

US stocks have finished the year in the same direction as January 72% of the time, according to Howard Silverblatt of S&P Dow Jones Indexes. Traders believe that crude prices could head to levels of $38.45 in the near term.

The TAIEX closed down 223.80 points, or 2.68 percent, at 8,114.26, after moving between 8,109.09 and 8,326.33.

Germany’s DAX was down 4.3%, while the Cac 40 in France was 3% lower.

Huang Cengdong, an analyst for Sinolink Securities in Shanghai, said: “The market will not improve because there will be heavy selling in the near future”. Fresh manufacturing PMIs on Monday showed a fall to 48.2 in December, from 48.6 in November, contracting for a 10th month and coming in below a Reuters poll forecast for 49.0.

The Caixin/Markit China manufacturing Purchasing Managers’ Index slipped to 48.2 in December from 48.6 in November, contracting for a 10th straight month. It is the first time the measure has been used. The ban applies to investors holding 5 percent or more of a company’s shares.

Chinese authorities have been trying for months to restore confidence in the country’s stocks after a plunge in prices in June rattled global markets and prompted a panicked, multibillion-dollar government intervention. Compare that to the first day of trading in 2015, when it closed at 3,350.

The turmoil spread to Europe and the United States, where the escalation of Middle East tensions added to market jitters.

Markets across Asia were stung by the data, as well as news that Saudi Arabia had severed diplomatic ties with its old foe Iran on Sunday after protesters ransacked its embassy in Tehran following the execution of a Shiite cleric.